FALLING  PRICES 


AND 


THE  REMEDY- 


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LYMAN '  F'GEORGE 


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FALLING   PRICES  AND  THE   REMEDY 


FALLING    PRICES 

AND   THE    REMEDY 


BY 

LYMAN    F.    GEORGE 


Kquity  and  justice  demand  that  tlie  merchant, 
manufacturer,  farmer,  and  wage-earner  sliall 
receive  as  much  consideration  at  the  hands  of 
the  law-makers  as  is  accorded  to  those  who 
deal  in  money. 


BOSTON 
GEORGE    HOOK    ITIUJSITING    CO. 

I S9S 


Copyright,  iSg8 
By  Lyman  F.  George 

Ail  rig/its  reserved 

Entered  at  Stationers^  Hall,  London 


Colonial  '^xt%% 

Electrotyped  and  Printed  by  C.  H.  Simonds  &.  Co. 
Boston,  U.S.A. 


w 


A© 


TO    MY    WIFE 

aUce 

IN    RECOGNITION    OF    HER 

INVALUABLE    INSPIRATION    IN    PROMPTING 

MY    MIND   TO    THE    SERIOUS    CONSIDERATION    OF    A 

SUBJECT     CONCERNING    WHICH     I     HELD     A    VERY     POSITIVE 

OPINION,    BUT    UPON    WHICH,    HITHERTO,  I 

HAD    GIVEN    BUT    LITTLE    STUDY, 

I   DEDICATE  THIS    BOOK. 


0 


.i8(M81 


PREFACE. 

A  SINGLE,  irresistible  thought,  energizing,  pos- 
sessing, and  impelling  me,  has  led  me  out  of  the 
paths  of  my  daily  vocation  and  forced  me  into  the 
arena  of  public  discussion.  The  great  truth  which 
I  have  sought  to  make  clear,  which,  if  I  could,  I 
would  burn  in  upon  the  understanding  of  my  fel- 
low men,  is  that  national  prosperity  is  governed  by 
laws,  that  these  laws  are  now  known,  and  can  be 
scientifically  applied,  and  that  it  is  only  necessary 
for  our  merchants,  manufacturers,  farmers,  and 
laborers  to  ascertain  these  laws  in  order  to  enable 
them  to  dispel  from  our  midst  forever  the  long 
night  of  poverty,  depression,  and  despair  which 
now  engulfs  us.  If  a  perusal  of  this  book  will 
help,  even  in  a  small  degree,  to  establish  this  great 
truth  in  the  minds  of  my  countrymen,  then  I  shall 
feel  my  labors  have  been  not  wholly  vain. 

In  the  preparation  of  this  work  my  thanks  are 
due  to  Mr.  Tiios.  H.  Pkoctkk,  the  well-known 
writer  on  financial  and  economic  subjects,  lor  nnich 
valuable  information  and  suggestion,  as  well  as  for 
his  generous  assistance  in  otiier  respects  ;  to  Mr. 


vi  PREFACE. 

Aug.  Sauerbeck,  the  world's  greatest  statistician, 
for  his  index  tables  ;  and  to  Mr.  Clinton  V.  S. 
Remington,  the  well-known  I'^all  River  authority, 
for  valuable  price  quotations  on  cotton  and  cloths. 

LvMAN  F.  George. 
March  i,  1898. 


CONTENTS 


CHAPTER 

Introduction       ...... 

I.     Thirty  Years'  Fall  in  Prices 
II.     Disastrous  Effects  of  Falling  Prices 

III.  Opinions  Regarding  the  Cause  of  the 

P'all  in  Prices     . 

IV.  MoNEV,  Its  Use  and  Abuse 

\'.     Our  Money  a  Banker's  Money 
V'l.     A   Monetary   System  Which  Will    Re 
.STORE  Prosperity         ... 
V'l  I.     Bimetallism  as  a  Cure    ... 
\'III.     I.vmigration         ..... 
I.\.     Trusts   and    Department   Stores   as  a 

Cause      

X.     Overproduction          .... 
XI.     Hard  Times  the  Effect  of  "Improved 
Machinery  " 

.\'II.      CV)NFIDENCR.  ..... 

Xin.     Supply  and  Demand 
.\'I\'.     Review    and    Summary   oi-    ()\i:ri'KoI)Uc 
TION 

XV.     Review  and  Summakv  of   PiLmetallism 
XVI.     Conclusion  ...... 


PAGE 
I 

4 

27 

36 

59 
76 

1 1 1 

125 
132 

139 

'45 

148 
152 
'55 

160 

";7 
226 


FALLING  PRICES  AND  THE 
REMEDY. 


INTRODUCTION. 

In  presenting  this  work  to  the  public  the  author 
desires  to  call  the  attention  of  the  merchants  and 
manufacturers  of  New  England  to  the  fact  that 
they  have  been  doing  business  on  a  falling  market 
for  thirty  years,  and  are  to-day  confronted  not  only 
with  falling  prices  but  with  a  congested  market 
resulting  from  an  accumulated  stock  of  goods,  and 
with  an  outlook  which  portends  disaster  to  all 
industrial  enterprises. 

Having  been  engaged  in  mercantile  j^ursuits,  the 
author  has  had  an  opportunity  to  exchange  views 
with  many  leading  merchants  and  manufacturers, 
and  with  the  business  men  of  the  country  generally, 
upon  this  state  of  affairs,  and  in  but  few  instances 
has  he  found  a  man  who  was  desirous  of  a  fall  in 
prices  and  the  resulting  effect  of  business  depres- 
sion.    He  was  therefore  led  to  inquire  of  our  most 


2  FALLING   PRICES. 

eminent  public  men  —  those  who  are  responsible 
for  conditions  growing  out  of  legislation  —  the 
cause  of  this  perpetual  and  ruinous  fall  in  prices 
for  such  a  long  and  trying  period. 

riavang  at  best  received  only  evasive  or  conflict- 
ing answers,  and  finding  the  anxiety  intensifying 
in  the  mind  of  the  business  community,  and  suffer- 
ing and  distress  increasing  in  the  ranks  of  the 
working  classes,  the  author  determined  to  take  up 
the  study  of  political  economy,  and  to  discover,  if 
possible,  for  himself  the  real  cause  of  the  rise  and 
fall  in  values  in  the  markets  and  nations  of  the 
world. 

In  undertaking  this  work  the  author  resolved,  at 
the  outset,  to  pursue  the  subject  on  conscientious 
and  patriotic  lines,  and  to  avoid  those  opinions  put 
forth  by  men  for  the  purpose  of  influencing  votes 
for  party  success  in  order  thereby  to  get  legislation 
in  the  interest  of  special  grants  and  privileges, 
instead  of  seeking  the  common  welfare  of  the 
whole  country.  In  order  to  do  this  he  believed  it 
necessary  to  study  the  laws  and  systems  laid  down 
by  the  old  masters  and  authorities  of  the  world, 
and  then  determine  to  the  satisfaction  of  his  own 
mind  whether  the  rise  and  fall  in  prices,  the  high 
or  low  values  ruling  in  different  nations,  were  the 
result  of  chance,  of  nature,  or  of  laws  and  systems 
designed  by  man  for  the  purpose  of  producing 
desired  results,  and  furthermore  to  ascertain  if  it 
were  possible  to  get,  through  legislation,  a  continu- 


INTRODUCTION.  3 

Oils  rise  or  a  continuous  fall  in  price,  or  to  establish 
high  or  low  values  upon  property  and  commodities 
by  adopting  a  certain  system  and  law  designed  to 
produce  any  desired  effect  upon  prices  by  the 
people  of  any  nation. 

After  having  devoted  much  time  and  labor  to 
study  and  research,  the  author  submits  to  his 
readers  the  fixed  and  positive  opinions  of  the 
world's  standard  authorities  upon  this  great  ques- 
tion, —  making  this  single  observation,  however, 
that  they  are  all  of  one  opinion  upon  one  point  : 
namely,  that  all  prices  and  values  ruling  in  differ- 
ent nations  are  established  by  the  laivs  and  sys- 
tems prevailing  in  those  nations. 

It  is  the  firm  belief  of  the  author  of  these  pages 
that  the  business  men  of  New  England  are  imbued 
with  a  broad  and  patriotic  spirit ;  that  they  would 
waive  all  selfish  ends  in  considering  a  great  ques- 
tion involving  the  welfare  of  their  whole  country ; 
and  that  if  they  found  upon  the  study  of  such  a 
question  they  had  been  mistaken  in  theory,  they 
would,  to  a  man, — as  they  substantially  did  from 
1850  to  i860  upon  the  question  of  slavery, — 
change  their  opinion  in  order  to  effect  the  great- 
est good  to  the  greatest  number.  This  belief  has 
been  the  staff  of  encouragement  upon  which  he 
has  leaned  in  his  earnest  and  untiring  efforts  to 
discover  if  there  were  laws  and  systems  which 
would,  if  ai)plied,  lead  us  out  of  this  long  night  of 
business  depression  and  constantly  falling  prices. 


CHAPTER  I. 

THIRTY    years'    FALL    IN    PRICES, 

On  January  first  of  every  year  most  business 
houses  take  their  annual  account  of  stock,  as 
upon  the  rise  or  fall  in  the  value  of  the  stock  on 
hand  at  that  time  depends  very  largely  the  profits 
of  the  previous  year's  business.  This  is  such  a 
self-evident  fact  that  all  prudent  business  men 
wait  until  stock  has  been  taken,  the  books  bal- 
anced, and  the  profit  or  loss  of  the  past  year's 
business  ascertained,  before  placing  contracts  for 
the  coming  year. 

All  good  business  men  understand  the  advan- 
tage of  buying  heavily  at  the  beginning  of  the 
year,  during  periods  of  rising  prices ;  and  they 
also  know  the  disadvantage  of  large  purchases 
during  periods   of  falling  prices. 

For  the  careful  business  man,  who  is  not  a 
student  of  political  economy,  or  who  is  not 
familiar  with  the  laws  and  systems  designed  to 
produce  high  or  low  prices,  it  is  fairly  safe  for 
him,  in  making  his  calculations  and  fixing  upon 
the  policy  to  be  pursued  in  his  business  affairs 
for  the  coming  year,  to  be  guided  by  the  business 
prosperity  of   the   nation   during  his  past   year's 

4 


THIRTY    YEARS'  FALL.  5 

business.  It  is  also  considered  good  business- 
sense  to  act  upon  the  theory  that,  if  prices  have 
been  not  only  good,  but  have  shown  a  slight  ad- 
vance in  all  departments  of  commerce  and  trade 
throughout  the  land  over  those  of  the  preceding 
year,  this  is  an  indication  that  the  markets  are 
low  in  stocks  of  goods ;  that  the  factories  and 
mills  have  been  unable  to  keep  su])ply  up  to  the 
demand  ;  and  that  under  such  conditions  it  would 
be  safe  to  contract  for  a  sufficiently  large  stock  of 
goods  to  fill  all  prospective  orders  for  at  least  the 
first  six  months  of  the  year.  It  would  also  be  rea- 
sonable and  logical  to  think  that,  since  the  mills 
were  unable  to  supply  the  demand  of  the  previous 
year's  trade,  as  reflected  by  a  general  rise  in  prices, 
under  such  circumstances  labor  throughout  the 
country  must  not  only  have  been  fully  employed, 
but  must  occupy  a  position  in  the  labor  market  to 
dictate  good  pay,  which  in  turn  will  enable  the  work- 
ing class  to  consume  a  larger  amount  of  goods. 

This  would  further  deplete  the  stock  on  the 
markets,  as  it  is  clear  that  the  working  class  is  al- 
ways in  need  of  goods,  and  that  its  extent  of  pur- 
chases is  limited  only  by  the  amount  paid  to  it  in 
wages.  It  will  be  seen  by  the  law  of  cause  and 
effect  that  this  rise  in  prices  would  continue  indef- 
initely, unless  interfered  with  by  some  deeper  prin- 
ciple more  potent  than  the  mere  laws  of  trade. 
The  increased  demand  caused  by  rising  prices 
would    constantly    operate    still    further    to    raise 


6  FALLING   J' RICES. 

prices.  As  far  as  the  mercantile  community  and 
the  producing  classes  are  concerned,  it  must  be 
admitted  that  this  condition  of  trade  would  be  very 
satisfactory.  But  that  there  is  another  class  in  so- 
ciety to  whose  interests  this  rise  in  prices  would  be 
detrimental  will  appear  as  the  argument  unfolds. 

To  reverse  this  jncture,  it  can  be  shown  that  the 
falling  prices  which  have  prevailed  for  thirty  years 
have  produced  the  present  deplorable  conditions, 
and  will  continue  indefinitely  to  do  so  under  the 
same  law  of  cause  and  effect  that  attends  rising 
prices,  unless  corrected  or  checked  by  the  same 
deeper  and  more  potent  principle  alluded  to  above. 

Prices  in  general  in  this  country  still  have  a 
downward  tendency,  and  as  a  result  the  business 
men  are  reducing  stock,  whilst  the  mills  and  fac- 
tories are  either  curtailing  their  output,  shutting 
down,  or  reducing  wages.  That  this  condition  of 
trade  is  very  undesirable  to  the  merchants,  and  to 
the  producing  classes  generally,  is  evident  without 
taking  time  to  prove  it.  The  fact  that  low  prices 
have  prevailed  through  any  preceding  year  is  proof 
that  the  subsequent  year,  with  causes  remaining 
the  same,  must  continue  to  show  a  continuous  fall. 
All  conservative  and  prudent  business  men  will 
purchase  the  smallest  amount  of  stock  possible  to 
meet  a  constantly  narrowing  and  shrinking  de- 
mand. At  the  same  time  the  output,  which  never 
lessens  in  ratio  to  the  falling  off  in  demand,  helps 
to  force  down  prices  through  the  accumulation  of 


TIIIRTY    YEARS'   FALL.  7 

stock,  which,  if  not  moved  at  forced  sales,  must 
cause  congestion,  and  finally  result  in  panic  and 
collapse,  —  as  was  the  case  in  1893,  when  over 
seventy-five  per  cent,  of  the  mills  and  factories 
were  forced  to  close.  Under  such  conditions  of 
trade,  it  would  be  folly  to  claim  that  any  consider- 
able class  of  the  people  desired  to  perpetuate  any 
laws  or  systems  that  they  generally  believed  to  be 
the  cause  of  the  distress. 

Before  showing  the  impossibility  of  changing 
the  continuous  upward  and  downward  tendency  of 
prices  without  first  changing  the  systems  and  laws 
created  for  the  purpose  of  producing  them,  I  will 
quote  the  following  statistics  and  tables  of  prices 
from  1865  to  1895,  showing  a  rapid  and  continu- 
ous fall  in  prices  under  which  our  merchants  have 
been  forced  to  do  business. 


1865 

1870 

1875 

1880 

1885 

1890 

1S95 

Copper  .     .     .     . 

$  .50 

$    .2li 

$  .22 

$  .21 

%  .ii> 

%  -13 

5  -lo 

Wheat,  bushel     . 

2.50 

1.40 

1.25 

1-33 

.92 

■'^Z 

•73 

Cotton,  11).       .     . 

I.22« 

.25 

•Mi 

•13 

.11 

.09! 

•05,; 

Beeves,  lb.       .     . 

.16 

.1  I 

.12 

.08 

•09l 

■04  :J 

•03i 

Dressed  Hogs,  lb. 

■'7 

■Hi 

•09^ 

^o^\ 

.06 

•04.1 

.06 

Com.  Wool     .     . 

•95 

•44 

.42 

•35 

•34' 

•33 

•17 

Lead,  lb.     .     .     . 

.20 

.16 

.12 

.07 

•03  i 

•03:1 

■03 1 

I'ig  Iron,  ton  . 

56.00 

21.00 

24.00 

27.00 

16.00 

20.00 

12.00 

Feather,  lb.     .     . 

•55 

.40 

•35 

.28 

.27 

•23 

.29 

'  It  will  l)e  noticed  tluit  cotton  is  f|iioted  at  ,5i.22;  this  was 
due  to  the  blockade.  .Soon  after  peace  was  declared,  it  fell,  and 
remained  at  about  forty-five  and  fifty  cents  for  some  years. 

*  The  above  quotations  on  wool  from  1885  to  1895  are  taken 
from  the  sales  book  of  a  large  and  reliable  wool  hou.se  in  Boston. 


8 


FALLING   PKLCES. 


The  above  table  I  have  compiled  from  the  mar- 
ket reports  of  the  files  of  the  New  York  Daily 
Tribune.  The  average  market  price  of  the  first 
month  of  each  five  years  was  selected,  for  thirty 
years." 

I  think  this  table  substantiates  the  statement 
that  we  have  had  falling  prices  for  thirty  years. 
To  show  that  this  fall  in  prices  is  destructive  to 
the  best  interests  of  the  whole  nation,  I  will  now 
submit  tables  to  prove,  by  showing  that  the  increase 
of  failures  has  kept  up  in  ratio  to  the  fall  of  prices. 
The  following  table  will  show  the  commercial  fail- 
ures in  the  Northern  States  from  1865  up  to  the 
year  1870,  after  which  it  shows  the  failures  of  the 
whole  country  : 

IN    THE    NORTHERN    STATES. 


Year. 

Number  of  Failures. 

Aggregate  Liabilities. 

1865 
1866 
1867 
1868 
1869 

632 
2,386 
2,197 
2,411 

$17,625,000.00 
47,333.000.00 
86,218,000.00 
57,275,000.00 
65,246,000.00 

'  It  will  be  remembered  that  gold  and  silver  were  not  used  as 
money  from  1862  to  1879.  These  metal  dollars  were  bought  and 
sold  as  metal,  and  not  as  dollars  to  be  used  in  general  business. 
They  no  longer  measured  values.  They  fluctuated  more  than 
any  other  commodity.  The  prices  during  the  period  from  1862 
to  1879  were  based  on  volume  of  money,  and  not  on  gold.  Wheat 
at  $2.50  per  bushel  would  pay  $2.50  worth  of  mortgage,  but 
wheat  at  fifty  cents  in  gold  to-day  will  only  pay  off  fifty  cents 
worth  of  mortgage. 


THIRTY    YEARS'  FALL. 


IN    THE    WHOLE    COUNTRY. 


Year. 

Number  of  Failures. 

Aggregate  Liabilities. 

1870 

3.551 

%  88,242,000.00 

1871 

2,915 

85,252,000.00 

1872 

4,069 

121,056,000.00 

1873 

5.181 

228,490,000.00 

1874 

5.695 

I  5 1 ,689,000.00 

1875 

7.404 

195,289,000.00 

1879 

6,652 

99.636,34200 

1880 

4.350 

57,120,995.00 

1881 

5.929 

76,094,667.00 

1882 

7.635 

93.238,93600 

1883' 

10,299 

175,968,000.00 

1884 

11,620 

248,740,000.00 

1885 

II, 116 

119,120,700.00 

1886 

10,568 

113,648,291.00 

1887 

9.740 

130,605,001.00 

1 888 

10,587 

120,242,402.00 

1889 

11,719 

140,359,490.00 

1890 

10,673 

175.032,836.00 

1891 

12.394 

193,178,000.00 

1892 

10,270 

108,595,248.00 

1893 

15.50S 

382,153,676.00 

1894 

12,724 

151,548,520.00 

1895^ 

12,958 

158,727,682.00^ 

I  call  the  reader's  attention  to  the  above  tables 
to  show  the  small  number  of  failures  in  1865,  when 
the  circulation  of  money  was  large  and  the  business 
done  on  a  paper  basis  ;  and  I  ask  him  to  compare 

'  About  .seventy-seven  per  cent,  were  tliose  of  small  traders 
whose  capital  was  less  than  $5,000. 

^  In  the  United  States  about  eighty-six  per  cent,  of  the  total 
number  of  the  concerns  failing  had  $5,000  or  less,  and  nine  per 
cent,  had  from  $5,000  to  $20,000  capital. 

'  I  am  greatly  indebted  to  The  Hradstreet  Company  for  the 
above  tables  of  failures  and  lial)ilities  from  1879  ^o  '895,  and  also 
for  the  note  showing  percentage  of  failures  of  small  concerns  in 
comparison  with  large  ones. 


lO 


FA /.LING   PRICES. 


the  same  with  the  large  number  of  failures  since, 
under  a  small  volume  of  money  and  a  gold  basis. 
The  difference  is  very  significant. 

The  following  table  of  Index  Numbers  compiled 
from  London  prices  of  forty-five  principal  commod- 
ities, by  Augustus  Sauerbeck,  F.  S.  S.,  who  is 
looked  upon  as  standard  authority,  shows  clearly 
that  some  cause  must  be  looked  for  of  further 
reaching  effect  than  that  of  tariff,  foreign  markets, 
foreign  labor,  or  free  trade,  since  prices  fell  in  that 
country  as  well  as  in  our  own.  Mr.  Sauerbeck's 
Index  Numbers  are  as  follows  : ' 


Index  Numbers  of 

Index  Numbers  of 

Year. 

45  Principal  Com- 

Year. 

45  Principal  Com- 

modities. 

modities. 

1874 

102 

1885 

72 

1875 

96 

1886 

69 

1876 

95 

1887 

68 

1877 

94 

1888 

70 

1878 

87 

1889 

72 

1879 

83 

1890 

72 

1880 

88 

1891 

72 

188 1 

85 

1892 

68 

1882 

84 

1893 

68 

1883 

82 

1894 

63 

1884 

76 

1895 

62 

'  "  There  have  been  various  Index  Numbers,  seven  or  eight 
of  accredited  authority,  but  after  a  careful  comparison  of  several 
of  these  numbers,  I  have  come  to  the  conclusion  that  Mr.  Sauer- 
beck's is,  upon  the  whole,  the  most  carefully  prepared,  and  the 
one  which  best  represents  the  general  movement  of  prices."  — 
Royal  Commission  on  Depi-ession  in  Agriculture.  (Prof.  H.  S. 
Foxwell,  No.  23,558.) 


THIRTY   YEARS'  FALL.  II 

When  one  contrasts  the  conditions  of  trade  from 
1 86 1  to  1868,  which  gave  an  annual  rise  in  values 
upon  all  investments  for  seven  years  equal  to  the 
fall  in  values  during  the  subsequent  thirty  years, 
it  is  easy  to  see  that  it  was  not  the  superior  brains 
of  the  men  doing  business  during  the  former  period, 
but  the  more  favorable  conditions  of  the  latter 
which  made  their  fortunes.  Their  success  grew 
out  of  the  constant  enhancement  of  value  of  every- 
thing they  bought.  This  can  be  easily  proven  by 
the  fact  that  men  who  were  engaged  in  business 
in  1869  and  1870,  and  who  understood  the  princi- 
ples of  financial  legislation,  sold  out  their  business 
at  the  high-water  mark  of  prices  in  material  and 
merchandise,  and  invested  in  the  low-water  mark 
price  of  bonds  and  securities.  They  knew  full 
well  what  the  destruction  of  so  much  government 
money  was  designed  for.  The  truth  of  the  mat- 
ter is  that  the  men  during  the  period  of  rising 
prices  did  not  do  the  money-making  part  of  the 
business,  but  constantly  rising  prices  did  it  for 
them. 

Any  business  man  can  sleep  more  rcstfully  when 
he  knows  that  every  morning  he  awakes  a  richer 
man  from  the  rise  in  values  upon  all  he  owns,  and 
he  will  naturally  wear  a  different  expression  upon 
his  face  from  that  of  the  business  man  of  to-day, 
who  goes  to  sleep  conscious  of  the  fact  that  every 
morning  he  awakes  a  poorer  man  to  the  extent  of 
the  fall  in  prices  of  everything  in  which  he  has  his 


12  FALLING  PRICES. 

money  invested,  especially  if  this  has  been  going 
on  for  thirty  years. 

While  Mr.  Sauerbeck's  Index  Numbers  do  not 
show  such  a  violent  drop  in  prices  for  England  as 
the  Tribunes  market  reports  do  for  America,  al- 
most any  practical  business  man  can  see  how  well- 
nigh  impossible  it  must  be  for  any  new  undertaking 
in  which  "  clear  cash  "  is  invested  in  material,  with 
the  annual  shrinkage  for  thirty  years  constantly 
going  on,  as  shown  by  the  above  tables,  and  with 
the  close  margins  existing  under  the  sharp  compe- 
tition and  depression  in  trade,  to  not  only  hold  its 
own  but  to  avert  disaster  in  time. 

The  difference,  however,  between  the  man  who 
did  business  under  rising  prices  and  those  now  do- 
ing it  under  falling  prices,  is  that  the  former  did 
not  oppose  any  measures  in  legislation  which  sent 
prices  "  kiting "  for  eight  years ;  while  the  busi- 
ness men  of  to-day,  especially  of  the  East,  are  op- 
posed to  any  movement  in  legislation  which  will 
even  temporarily  check  the  downward  trend  of 
prices.  Of  course  there  are  instances  where  some 
business  men  go  back  of  what  their  rich  neighbor 
said,  who  retired  from  business  years  ago,  or  what 
the  discount  clerk  tells  them  the  president  of  the 
bank  said,  as  to  why  prices  fall  ;  such  men  inves- 
tigate for  themselves  the  laws  passed  in  Congress 
from  1861  to  1865,  and  read  Congressional  pro- 
ceedings, and  thus  find  out  that  there  were  two 
classes  in  this  country,  and  that  these  classes  had 


THIRTY    YEARS'  FALL.  1 3 

conflicting  interests ;  that  one  class  wanted  low 
prices,  while  the  other  class  wanted  high  prices. 
The  former  class  wanted  to  buy  much  for  few  dol- 
lars ;  they  had  no  interest  in  business  prosperity ; 
in  fact,  their  success  depended  upon  the  business 
man's  distress  ;  while  the  class  who  had  all  in 
farms,  in  commodities,  in  mines,  furnaces,  facto- 
ries, or  in  business  pursuits  generally,  wanted 
money  issued,  and  were  not  particular  what  kind 
it  was  so  long  as  it  gave  the  country  prosperity 
and  power  to  put  down  rebellion  and  preserve  the 
Union. 

We  are  now  brought  face  to  face  with  an  exist- 
ing fact  which  cannot  be  pushed  aside,  and  cannot 
be  circumvented.  We  must  meet  it ;  we  must 
contest  it  and  change  it,  or  we  must  accept  it  as 
being  an  unalterable  condition  to  which  we  must 
unconditionally  surrender. 

There  is  no  longer  the  fallacy  of  "  low  or  falling 
prices  being  a  blessing"  existing  in  the  minds  of 
the  people  in  the  East,  West,  North,  or  South. 
The  farmer  has  been  crying  out  for  higher  prices 
for  his  crops  for  twenty  years.  The  abandoned 
farms  of  the  Plast,  the  evicted  farmer  of  the  West, 
present  a  picture  of  agricultural  decay  in  this  new 
country,  resulting  from  falling  prices,  which  makes 
the  heart  sick.  The  planter  of  the  South  has 
struggled  on  for  years  under  promises  of  restored 
prices  and  prosperity,  until  now,  after  twenty  years 
of  exhausted  fortitude  and  i)atience,  he  has  at  last 


14  FA  1. 1. 1  A' G   PRICES. 

seen  the  cotton  of  his  section,  which  once  bronght 
forty  cents,  settling  down  to  six  cents  a  pound  ; 
and  as  a  result  he  finds  not  only  his  plantation  and 
machinery  mortgaged  by  Eastern  or  ICnglish  capi- 
talists, but  his  ungrown  crop  covered  by  the  cold 
hand  of  the  usurer  for  money  advanced  upon  it, 
and  like  the  farmer  he,  too,  in  the  end,  must  aban- 
don his  holdings  to  those  who  know  not  work. 

The  miner  who  has  given  his  whole  life  to  bring- 
ing to  the  earth's  surface  copper,  lead,  iron,  and 
other  ores,  meets  the  same  fate  of  the  farmer  and 
planter.  He,  too,  looks  back  upon  the  day  of 
high  prices,  which  with  him  was  the  day  of  pro.s- 
perity ;  but  to-day  he  is  also  brought  face  to  face 
with  prices  so  cruelly  low  that  they  crush  the 
strongest  heart. 

Then  comes  that  great  class  of  wage-workers, 
once  prosperous  and  free,  but  to-day  facing  a  fu- 
ture as  black  as  night,  without  a  ray  of  hope,  most 
mercilessly  cut  down  in  wages,  and  this  without 
being  consulted.  Worse  still,  they  are  told  that 
their  hunger  will  soon  bring  them  to  terms.  All 
this  suffering  and  sorrow  to  the  wage-earners 
grows  out  of  a  constant  and  persistent  fall  in 
prices  which  a  few  sordid  and  hardened  rulers 
term  "the  blessing  of  low  prices." 

The  merchant  with  his  large  stock  of  goods 
drums  the  retailer  for  trade,  while  the  retailer  sits 
in  his  store  with  last  year's  styles  unsold,  and  his 
bills  dragging  upon  his  heels.     In  desperation  he 


THIRTY   YEARS'  FALL.  1 5 

rushes  to  his  windows,  rearranges,  and  again 
marks  down  his  goods.  But  still  the  people  do 
not  come  to  buy.  They  look  in  his  windows  and 
comment  upon  how  low  everything  is  getting,  but 
turn  wistfully  away,  while  the  storekeeper  looks  at 
their  threadbare  clothes  and  poorly  shod  feet,  won- 
dering why  the  people  do  not  buy,  —  forgetting 
all  about  the  abandoned  farms,  the  mortgage-cov- 
ered plantations,  and  the  cut-downs  and  shut-downs 
in  the  mills,  mines,  and  factories.  At  last  the  re- 
tailer, like  the  wholesaler,  the  manufacturer,  and 
the  farmer,  comes  to  the  conclusion  that  he,  too, 
is  tired  of  low  prices.  At  last,  the  wage-worker, 
finding  that  before  he  can  buy  cheap  he  must  first 
suffer  a  cut  in  his  wages  in  order  to  have  cheaper 
goods  put  on  the  market,  resolves  that  he  has  had 
enough  of  low  prices.  And  to-day  it  may  safely 
be  said  that,  outside  of  the  few  whose  fortunes  are 
in  non-shrinkable,  non-taxable,  interest-bearing  se- 
curities, the  whole  people  of  the  nation  have  be- 
come heartily  sick  of  low-priced  goods,  and  would, 
to  a  man,  advance  prices  all  along  the  line,  being 
perfectly  willing  now  that  planter,  farmer,  and 
wage-earner  should  share  in  the  advance. 

The  press  of  the  East  has  wrongfully  instilled 
into  the  minds  of  the  people  of  New  England  that 
the  lower  the  [)rices  forced  upon  the  producers  of 
food  and  raw  material  in  the  South  and  West,  the 
better  it  would  be  for  the  consumers  of  fo(xl  and 
manufacturers  of  raw  material  in  the  luist  ;  since 


1 6  FALLING   PRICES. 

the  wage-earner  is  protected,  first,  by  his  labor  or- 
ganization, and  secondly  by  a  high  tariff  in  which 
he  shares  with  the  manufacturer,  and  that  under 
these  protective  measures  he  will  not  suffer.  This 
teaching  is  as  narrow  as  it  is  short-sighted. 

The  wealth-producing  sections  in  raw  material 
amount  to  four-fifths  of  the  nation ;  and  when  this 
great  portion  of  our  country  has  been  robbed  as 
they  have  been  through  low  prices  for  the  past 
thirty  years,  the  other  one-fifth  of  the  country  is 
sure  to  suffer  as  severely  in  the  end.  It  may  be 
true  that  the  growers  of  food  and  raw  material  suf- 
fer first  and  longest  when  an  era  of  low  prices  sets 
in,  as  has  been  proved  in  our  experience  during  the 
past  thirty  years.  The  country  being  very  rich 
when  prices  began  to  fall,  men  who  were  growing 
raw  material,  even  at  a  loss,  kept  on  hojoing  for  the 
best ;  but  not  until  they  had  exhausted  their  reserve 
capital,  accumulated  under  high  prices,  did  they 
begin  to  murmur  and  organize  politically  to  protect 
their  sectional  interests.  During  all  this  time  the 
manufacturers  of  the  East  were  selling  under  legis- 
lative protection,  while  the  wage-earners  sustained 
their  price-lists  through  labor  organizations  ;  but  in 
the  end  they  find  that  prices  have  fallen  to  that 
level  at  which  both  the  employer  and  employee  are 
threatened  with  bankruptcy  and  want.  Or,  to 
express  it  more  clearly,  the  East  has  found  out 
that  by  impoverishing  the  raw-material  growing 
West  and  South,  it  has  lost  its  great  customer,  and 


THIRTY    YEARS'   FALL.  1/ 

that  the  only  way  to  regain  the  prosperity  it  once 
enjoyed  is  first  to  restore  those  profitable  prices  to 
the  West  and  South,  under  which  they  will  again 
send  their  orders  to  the  East,  that  she  may  again 
run  her  mills  night  and  day.  This  will  restore 
prosperity.  It  formerly  gave  the  whole  country 
prosperity,  except  a  very  small  class,  who  were 
investors  in  bonds,  and  who  lived  on  board  ocean- 
liners  ;  who  bought  their  goods  abroad,  but  whose 
influence  over  our  legislation  has  always  been  to 
depress  prices,  until  now  Europe  can  get  our  raw 
products  for  nearly  one-third  their  value,  thus 
impoverishing  our  producers  and  destroying  our 
own  market. 

That  this  question  of  falling  prices  is  the  result 
of  some  law  or  system  which  has  a  very  extended 
effect  can  be  best  judged  by  the  fact  that  it  is  felt 
throughout  the  whole  Western  world.  True,  those 
nations  which  are  more  closely  connected  by  lan- 
guage, travel,  custom,  laws,  and  systems  affecting 
commercial  transaction  and  trade  relations,  are  the 
most  deeply  affected.  One  remarkable  fact  will  be 
observed,  however,  which  is  that,  during  the  past 
thirty  years  of  falling  prices,  there  have  been  no 
wars,  pestilence,  famine,  or  widespread  disaster  of 
any  kind  to  which  this  alarming  destruction  of 
values  can  be  attributed,  at  least  not  to  those 
nations  most  closely  allied  by  trade  and  commerce. 

It  is  shown  by  Mr.  Sauerbeck's  Index  Numbers, 
that  prices  have  fallen  <|iiile  as  heavily,  for  the  past 


I  8  FALLING   PRICES. 

ten  years,  in  Jingland  as  in  America,  while  other 
nations  have  felt  the  fall,  if  not  so  severely,  yet  as 
steadily  and  as  continuously,  and  seemingly  by  the 
same  causes  affecting  us,  whatever  those  may  be. 

In  looking  over  Mr.  Sauerbeck's  Index  Numbers, 
it  will  be  observed  that  the  fall  in  prices  in  Eng- 
land, from  1868  to  1895,  move  downward,  and  in 
close  sympathy  with  prices  in  this  country  during 
the  same  period,  which  forces  us,  when  looking  for 
the  cause,  to  find  one  which  is  not  only  far-reach- 
ing, but  at  the  same  time  productive  of  simultane- 
ous and  similar  effects,  here  as  well  as  in  England. 

Having  thus  far  presented  tables  of  statistics  of 
the  most  eminent  men  who  stand  as  the  recog- 
nized highest  authorities  at  home  and  abroad  in 
substantiating  that  which  we  claim  to  be  a  fact,  — 
namely,  a  thirty  years'  fall  in  prices  ;  and  having 
also  submitted  statements  and  opinions  of  our 
public  men  of  the  disastrous  effects  upon  the  ma- 
terial welfare  of  the  nation  in  general,  and  against 
the  interest  of  the  producers  and  distributors  of 
wealth  in  particular, — including  in  the  above- 
named  classes  the  mercantile,  agricultural,  indus- 
trial, and  laboring  classes,  —  I  now  desire  to  call 
the  reader's  attention  to  the  fact  that  this  long 
and  continual  fall  in  prices,  as  well  as  its  disas- 
trous effects,  was  neither  sought  nor  desired  on 
the  part  of  the  above-named  interests.  Yet  from 
some  cause  it  has  been  persistent  and  continuous, 
in  spite  of  all  the  protests  and  objections  made  on 


THIRTY    YEARS'  FALL.  1 9 

the  part  of  those  representing  the  wealth-producers 
of  the  land. 

The  writer  is  willing  to  hazard  the  opinion  that 
if  it  could  be  known  by  the  masses  of  the  nation 
that,  by  adopting  a  certain  system,  law,  or  policy 
known  to  political  economy,  it  would  raise  prices 
and  bring  national  prosperity,  the  people  would 
carry  every  State  in  the  Union  by  voting  for  its 
adoption. 

The  patriotism  of  the  American  people  is  fast 
rising  above  party  leaders  and  party  platforms. 
Matters  are  becoming  too  serious  to  permit  mere 
politics  longer  to  interfere  in  them.  Conflict  of 
opinion  is  beginning  to  intensify  as  to  the  cause 
of  our  troubles  ;  and  this  is  the  first  sign  of  hope, 
the  first  ray  of  light,  which  has  appeared  during 
the  long  depression.  When  all  classes  have  been 
reached,  and  suffering  has  become  general,  as  in 
the  present  case,  a  spirit  of  harmony  between  pre- 
viously conflicting  interest  is  sure  to  be  manifested ; 
and  the  moral  law  in  the  community,  which  always 
asserts  itself  in  the  face  of  danger,  injustice,  or 
suffering,  will  cause  men  to  rela.x  their  hold  upon 
their  positive  and  rigid  opinions,  the  origin  and  au- 
thority for  which  they  cannot  trace  back  of  their 
party  leaders,  party  press,  or  party  platform.  I  lav- 
ing seen  our  ])resent  .system  ad()i)ted  by  both  par- 
ties, they  have  taken  it  for  granted  that  tiie  system, 
or  policy,  was  a  correct  one.  As,  in  the  case  of 
sickness,  they  leave  all   matters  of  treatment  and 


20  FALLING   PRICKS. 

medicine  to  their  doctor ;  as,  in  the  case  of  reli- 
gion, they  follow  their  parents  and  their  ministers, 
so  it  is  no  wonder  that  men  whose  every  minute 
is  taken  up  with  the  care  of  business  have  no  time 
to  give  to  the  study  of  political  economy,  and  at 
best  have  but  limited  knowledge  of  the  cause  of  na- 
tional disaster  in  commercial  affairs.  To  show  this, 
I  will  quote  from  one  of  New  England's  grandest, 
if  not  her  greatest  sons,  Daniel  Webster  : 

By  far  the  most  valuable  practical  knowledge  that  can 
illumine  the  mind  of  man  is  that  concerning  money.  A 
correct  knowledge  of  its  j^rinciples  and  operations  is  worth 
more  to  the  merchant  and  the  man  of  enterprise  than  the 
capital  invested  in  his  business;  and  to  the  farmer,  the  ar- 
tisan, the  salary  or  wage  laborer,  tlian  tlie  outcome  of  ten 
years  of  his  toil.  Yet,  even  among  merchants  and  those 
who  conduct  the  great  enterprises  of  the  country,  hardly 
one  in  a  thousand  has  any  real  or  correct  knowledge  of  a 
matter  which,  more  than  all  others,  should  receive  their  pro- 
found study.  It  is  almost  universally  true  that  that  which 
is  counted  as  a  knowledge  of  money  in  reality  is  ignorance 
of  the  grossest  character.  Out  of  that  ignorance  I  have 
spoken  things  of  wJiich  I  am  now  ashamed  and  greatly 
grieved,  and  which  I  shall  undo  if  life  and  the  opportunity 
are  spared  me. 

Every  business  man  is  excusable  for  not  being 
able  to  account  for  years  upon  years  of  falling 
prices,  especially  when  the  same  becomes  not  only 
national  in  scope,  but  world-wide ;  and  when,  upon 
finding  the  effects  coming  home  to  himself,  he,  in 
seeking  the  cause,   finds  himself  confronted  with 


THIRTY   YEARS'   FALL.  21 

conflict  of  opinion  in  each  and  every  party,  throw- 
ing his  mind  into  utter  confusion  upon  his  first  at- 
tempt to  find  a  solution.  Becoming  discouraged 
in  this  first  attempt,  unless  he  has  a  mind  superior 
to  the  average  business  man,  and  resolves  that  he 
will  study  the  question  for  himself,  he  is  very  apt 
to  drift  along  for  years  with  the  idea  which  most 
shiftless  and  careless  business  men  fall  into  when 
they  find  a  screw  loose  in  their  business  which  can- 
not be  easily  accounted  for,  —  that,  "  if  let  alone,  it 
will  all  come  around  right  in  time." 

This  has  been  the  position  taken  by  the  average 
business  man  for  the  past  fifteen  or  twenty  years 
regarding  falling  prices,  but  with  the  business  man 
who  is  a  thoroughbred  in  business  it  is  looked  at 
in  an  entirely  different  light.  He  wants  to  knoiv. 
If  he  cannot  find  knowledge  by  one  method,  he 
seeks  another,  and  usually,  before  he  can  become 
satisfied,  he  is  driven  to  make  a  study  of  the  sub- 
ject for  himself.  After  having  studied  and  found 
the  correct  solution,  and  become  informed  upon  the 
question,  he  finds  that  almost  every  man  he  meets, 
and  whom  he  knows  has  not  studied  the  question, 
will  turn  from  him,  either  with  a  feeling  that  he 
cannot  meet  the  logic  and  arguments  of  his  op[)o- 
nent,  or  else  that  he  "  knows  it  all  "  because  he  has 
"read  all  al)out  it  in  the  papers,"  and  docs  not  wish 
to  discuss  it.  To  .show  how  few  business  nu-n 
there  are  who  iJo  know  the  cause  in  the  fall  ol 
prices,  I  have  quoted  Webster  ;  in  order  now  to  show 


22  FALLING   l^RLCES. 

that  most  business  men  do  not  know  the  effects  of 
the  various  monetary  systems,  I  will  quote  I^odin 
(1557).  who  says  : 

Men  have  so  well  obscured  the  facts  about  money  that 
the  great  part  of  the  jjeople  do  not  see  them  at  all.  The 
moneyers  do  as  the  doctors  do,  who  talk  Latin  before  women 
and  use  Greek  characters,  Arab  words,  and  Latin  abbrevia- 
tions, fearing  that  if  the  people  understood  their  receipts 
they  would  not  have  much  opinion  of  them. 

One  would  naturally  suppose  that,  moved  by 
patriotism,  by  the  love  of  justice,  and  the  cause  of 
humanity,  the  press  of  this  country,  supported  as 
it  is  by  the  people,  would  give  the  laws  set  forth 
by  the  world's  greatest  authorities  upon  the  class 
of  legislation  needed  to  effect  a  continuous  fall  in 
prices,  or  on  the  other  hand  would  show  that  class 
of  legislation  which  would  cause  a  continuous  rise 
in  prices.  It  would  be  difficult  to  find  a  man  of 
prominence  who  will  claim  that  it  is  impossible  to 
force  prices  up  or  down,  in  view  of  the  steady  rise 
in  prices  from  i860  to  1867,  and  that  after  the 
reversal  of  the  "lever,"  or  systems  and  laws  then 
existing,  there  was  a  continuous  fall  for  thirty 
years.  More  especially  does  this  fact  carry  weight 
when  it  is  known  that  in  each  instance  the  rise  and 
fall  in  prices  was  caused  by  the  adoption  of  those 
systems  recognized  by  all  standard  authorities  on 
political  economy,  and  which  in  each  instance  was 
sufficient  to  produce  the  desired  effects. 

We  have  shown  the  continuous  fall  in  prices  for 


THIRTY    YEARS'  FALL.  23 

over  thirty  years  by  Index  Numbers  prepared  by 
the  acknowledged  ablest  authorities  abroad,  and 
also  those  of  standard  authorities  at  home,  and  feel 
that  there  can  be  no  reasonable  doubt  upon  this 
point.  Further  on  we  shall  show  the  disastrous 
and  the  most  deplorable  effects  resulting  from  it. 

Since  it  is  the  desire  of  men  in  all  schools  and 
of  all  parties  to  raise  prices  and  to  restore  general 
prosperity,  not  alone  in  the  centres  of  commerce 
and  trade  but  also  in  the  ranks  of  agriculturists,  as 
well  as  of  those  engaged  in  the  industries  and  in 
labor,  would  it  not  be  broad  intelligence  to  ignore 
all  party  lines  upon  other  questions,  and  to  ascer- 
tain the  systems  which,  if  applied  for  this  one  pur- 
pose, would  produce  high  prices  to-day  as  they  did 
centuries  ago,  and  by  so  doing  avoid  the  contention 
growing  out  of  party  feeling  and  prejudice.'* 

In  taking  this  step,  we  must  resolve  to  hold  our 
personal  views  in  suspense  if  the  systems  proposed 
by  the  authorities  (who  are  sustained  by  history, 
which  shows  that  the  results  took  place  which  they 
predicted)  seem  to  clash  with  our  party  or  even 
personal  interest,  trusting  that  that  whicli  will  ben- 
efit the  nation  as  a  whole  must  in  sonic  manner 
benefit  us  individually. 

It  is  a  very  prevalent  idea  to-day  that  no  real 
distress  had  come  from  the  unprecedented  fall  in 
price  during  the  past  quarter  of  a  century,  until 
about  four  years  ago.  This  arises  from  the  fact 
that  men  do  n(jt  memorize  events   which  d(j   not 


24  FALLING   PRICES. 

come  home  with  a  blow  to  them  personally.  Before 
they  can  judge  of  systems  and  their  effects,  they 
must  first  look  up  their  results  during  the  years 
they  are  in  force,  for  man's  memory  is  a  very  un- 
certain thing  to  depend  upon  for  accuracy  in  such 
matters.  The  incidents  and  events  chronicled  at 
the  time,  and  later  woven  into  history,  are  a  great 
deal  more  reliable.  Hence  it  is  necessary  to  pro- 
duce history,  which  oftentimes  refreshes  our  mem- 
ory and  assists  us  in  formulating  our  opinions 
regarding  the  merits  and  demerits  of  a  question. 

According  to  the  Index  Numbers  of  Augustus 
Sauerbeck,  the  fall  in  prices  commenced  in  1 820, 
and  continued  until  1843.  Without  going  into  the 
cause  at  this  time,  we  desire  only  to  give  the  dis- 
tressing effects.  This  we  do  in  order  to  correct 
the  fallacy  held  by  so  many  that,  the  lower  the 
price,  the  more  of  the  good  things  of  life  one  can 
procure.  Here  again  we  see  the  effects  of  a  lack 
of  knowledge  upon  political  economy  ;  for  had  such 
believers  been  influenced  by  this  knowledge,  they 
would  have  seen  that  there  were  two  classes  in 
society,  and  that  the  very  limited  class  who  were 
non-producers,  but  who  lived  upon  income  (these 
being  paid  in  the  products  of  the  great  class  of 
producers  at  low  prices,  often  below  cost  of  pro- 
duction), would  be  left  without  any  money  with 
which  to  purchase  at  any  price,  however  low  it 
might  be. 

Mr.  Sauerbeck's  Index  Numbers  show  that  in 


THIRTY    YEARS'  FALL.  2$ 

taking  thirty-one  leading  commodities  in  1819,  the 
Index  Number  being  106  at  that  time,  a  constant 
fall  in  prices  occurred  until  1843,  ^t  which  time 
eighty-two  becomes  the  Index  Number.  To  show 
the  effect  of  falling  prices  during  this  period  of 
twenty-four  years  upon  the  masses,  we  will  quote 
from  Sir  Archibald  Alison,  F.  R.  S.  E.,  to  show 
the  condition  of  society  in  England  during  these 
years  of  falling  prices.      He  writes  as  follows  : 

The  blue  folios  of  the  houses  of  Parliament  teem  with 
authentic  and  decisive  evidence  of  the  vast  increase,  during 
the  last  thirty  years,  of  crime  and  frequent  destitution  among 
the  working  classes  in  all  parts  of  the  empire.  Every  four 
or  five  years  a  brief  feverish  period  of  gambling,  extrava- 
gance, and  commercial  prosperity  is  succeeded  by  a  long 
and  weary  season  of  anxiety,  distress,  and  depression. 
Frightful  strikes  among  the  working  men,  attended  with 
boundless  distress  among,  and  hideous  democratic  tyranny 
over  them ;  suffering  or  pestilence  stalk  in  the  rear  of  fam- 
ine, and  popular  insurrection  has  become  so  common  that  it 
is  a  rare  thing  to  see  two  years  pass  without  martial  law 
being  of  necessity  practically  enforced  in  some  parts  of  the 
empire.  And,  as  if  to  bring  this  chaos  of  contradictions  to 
a  perfect  climax,  at  the  very  time  when  unheard-of  exer- 
tions have  been  made  for  the  education  of  the  people  in 
every  part  of  the  empire,  and  the  newly  aroused  fervor  of 
religion  in  all  denominations  of  Christians  has  drawn  fortli 
unparalleled  efforts  for  the  diffusion  of  the  gospel  among 
the  working  classes,  cnme  has  made  unexampled  progress 
in  every  part  of  the  empire;  and  the  .scandal  has  been 
exhibited  of  serious  and  detected  offences  having  multiplied 
sevenfold  in  a  realm  which,  in  the  same  period,  has  not 
added  more  than  seventy  per  cent,  to    the  amount   of  its 


26  FALLING  PRICES. 

population ;  in  other  words,  during  a  period  of  unparalleled 
growth  of  wealth  and  effort  at  instruction,  crime  has  aug- 
Tnented  ten  times  as  fast  as  the  numbers  of  the  people. 

We  repeat  it,  —  this  state  of  things  is  unj^aralleled  in  any 
other  age  of  the  world  or  quarter  of  the  globe.  We  say 
this  after  due  consideration  and  a  full  appreciation  of  the 
unutterable  and  now  forgotten  miseries  in  which  the  world 
in  general  and  ourselves  among  the  rest  have  been  involved 
in  former  ages,  from  the  ravages  of  foreign  war  or  the  grind- 
ing of  domestic  oppression.  Nothing  is  more  certain  than 
that  the  wretchedness  of  those  days  infinitely  exceed  any- 
thing in  the  present,  and  that,  compared  with  their  suffer- 
ings, the  low  wages  of  our  sullen  Chartist,  or  the  destitution 
of  our  starving  repealers,  would  be  esteemed  absolute 
paradise. 

Having  shown  that  we  have  had  falling  prices 
for  thirty  years,  I  will  now  show  that,  in  whatever 
nation  or  at  whatever  time  falling  prices  have  pre- 
vailed, they  are  always  accompanied  with  financial 
disaster  and  bankruptcy  to  the  merchant,  and 
enforced  idleness  and  want  to  the  laborer. 


CHAPTER    II. 

DISASTROUS    EFFECTS    OF    FALLING    PRICES    UPON 

REAL    ESTATE,    MERCHANTS,    FARMERS,    AND 

WORKING    CLASSES. 

Having  shown  in  the  previous  chapter  the  fall 
in  prices  of  all  kinds  of  property,  commodities,  and 
labor  for  thirty  years,  and  having  produced  tables 
substantiating  the  statements  made,  I  will  now 
proceed  to  show  the  disastrous  effects  which  this 
has  had  on  all  classes  except  one, —  which  one  I 
shall  designate  later. 

If  any  merchant  will  go  back  through  the  years 
subsequent  to  the  acts  of  Congress  from  1866 
down  to  1896,  thereby  refreshing  his  memory  in 
regard  to  the  distress  following  those  acts,  he  will 
find  a  wreckage  of  financial  institutions,  railroads, 
and  merchants,  and  the  loss  of  farms  and  homes, 
as  well  as  loss  of  time  and  wages  of  the  laboring 
class,  never  before  equalled  in  the  world's  history. 
I  do  not  desire  to  let  this  statement  rest  upon  my 
bare  assertion,  but  will  substantiate  it  with  facts 
and  figures. 

No  doul)t  the  famous  despatch  sent  out  by  Tom 
Scott,  president  of  the  Tcnnsylvania  Railroad  Co., 

27 


28 


FALLLYG  PRICES. 


in  1877,  ^^'ill  li^-'lp  to  refreshen  the  memory  of  the 
reader.  It  was  in  answer  to  one  sent  him  that  the 
people  Hving  on  his  lines  were  living  on  an  oatmeal 
diet.  Scott  answered,  "  I  will  send  them  a  leaden 
diet."  It  will  also  be  remembered  that  at  that 
time  there  were  five  States  under  arms,  and  that 
the  hungry  mobs  had  destroyed  $7,000,000  worth 
of  property  in  and  around  Pittsburg.  All  this 
trouble  and  suffering  was  the  result  of  falling 
prices,  which  commenced  with  the  years  1867  and 
1868.  To  show  further  the  severity  of  the  dis- 
tress existing  at  that  time,  I  will  quote  from  a  let- 
ter written  by  Henry  Carey  Baird,  who  is  the 
present  head  of  one  of  the  oldest  publishing  houses 
of  works  on  political  economy  in  America.  This  let- 
ter was  published  in  the  North  American,  of  Phila- 
delphia, Nov.  4,  1893.     I  quote  parts  as  follows: 

WRECK    OF    RAILROADS,    1876-1877. 

...  On  Feb.  22,  1877,  the  Railway  Age  of  Chicago 
stated  that  eighty-six  railroads  had,  during  the  year  1876, 
met  with  disaster  as  follows  : 


No.  of 
Roads. 

Mile- 
age. 

Capital  Invested. 

Sold  under  foreclosure 

Receivers  appointed,  or  foreclosures 
New  defaults 

46 
10 

3.460 
7.576 
2,577 

$217,848,000.00 
538,000,000.00 
156,661,000.00 

Grand  total 

86 

14.179 

$912,509,000.00 

And  the  same  paper,  under  date  of  March  22,  1877, 
says: 


J)/SASTROUS  EFFECTS. 


29 


"  Out  of  a  total  nominal  investment  of  the  railroads  of  this 
country  of  $4,775,000,000,  about  thirty-eight  per  cent.,  or 
$1,800,000,000,  is  represented  in  defaulting  roads,  and  is, 
therefore,  for  the  present  at  least,  almost  wholly  unproduc- 
tive to  investors.  .  .  . 

"  The  losses  incurred  by  the  shrinkage  of  the  stock  of  the 
four  principal  coal-roads  within  the  last  year  are  appalling, 
as  shown  by  the  following  table  : 


Value 
March  8,  1S76. 

Present  Value. 

Shrinkage. 

Central  New   Jer- 

sey   

Delaware,   Lacka- 

121,961,750.00 

$1,744,625.00 

$20,217,125.00 

wanna,    and 

Western  .     .     . 
Delaware    and 

31,178,000.00 

17,423,000.00 

13,755,000.00 

Hudson  Canal  . 
Reading .... 

24,000,000.00 
32,863,500.00 

10,400,000.00 
4,251,000.00 

1 3,000,000.00 
28,612,500.00 

Total  .     .     .     . 

$110,003,250.00 

$33,818,625.00 

$76,184,625.00 

"  Add  to  this  $76,000,000  of  loss  from  the  depreciation 
upon  the  bonds  of  the  companies,  and  the  estimate  that  the 
total  apparent  loss  caused  by  the  coal  panic  within  a  year 
will  reach  one  hundred  millions  of  dollars,  is  not  far  from 
correct.  .  .  .  The  loss  of  nearly  $8,000,000  in  annual  divi- 
dends by  the  stockholders  of  the  four  roads  named  is  a 
calamity  of  widespread  effect." 

On  April  16,  1877,  the  New  York  Tribune,  under  the 
heading  of  "  Wrecked  by  Real  Estate,"  says: 

"  A  reporter  of  the  Tribune  recently  had  a  long  interview 
with  a  gentleman  who  has  been  closely  identified  with  the 
ups  and  downs  of  the  market  during  the  past  few  years. 
'  It  is  a  frightful  retrospect,'  he  said,  'but  as  a  warning  to 
those  who  may  again  desire  to  sijc'culate  in  unimproved 
property,  the  whole  story  ought  to  be  t(jld.      It  is  not  ncces- 


30  FALLhXG   PRICES. 

sary  to  give  names  ;  the  facts  will  speak  for  themselves,  and 
those  at  all  acquainted  with  our  market  will  at  once  be  able 
to  identify  the  bodies  when  I  come  to  call  the  roll  of  the 
killed  and  wounded.  .  .  .  The  masses  of  the  people,  who 
imagine  that  they  alone  have  suffered  during  these  hard 
times,  would  open  their  eyes  if  they  could  understand  the 
misfortunes  sustained  during  the  past  four  years  by  many 
of  the  formerly  wealthy  families  of  New  York,  and  see  how 
changed  are  the  circumstances  and  surroundings  in  which 
they  are  now  living.'  " 

And  early  in  1877  the  same  journal  expressed  the  opin- 
ion that  either  the  debt  of  the  city  of  New  York  mu.st  be 
repudiated  or  the  entire  real  estate  in  that  city  would  pass 
into  the  hands  of  new  holders  at  lower  prices. 

Thus  it  will  be  seen,  from  the  quotations  I  have 
made,  that  millions  of  men  were  reduced  in  wages, 
and  millions  more  were  thrown  out  of  employment ; 
that  hundreds  of  millions  of  dollars  were  lost  by 
the  holders  of  stocks  in  the  railroads  of  the  country, 
while  the  shrinkage  shown  in  New  York  City  was 
only  a  fair  sample  of  the  shrinkage  in  real  estate 
throughout  the  land.  When  we  consider  that  this 
shrinkage  took  place  over  twenty  years  ago,  and 
has  been  going  on  steadily  from  that  time  until  the 
present  day,  and  that  to-day  we  are  still  confronted 
with  stagnant  business,  with  cut-downs  and  strikes 
on  every  hand,  with  unmovable  stocks  of  goods  in 
the  mills  and  retailers'  hands,  —  is  it  any  wonder 
that  men  become  tired  of  falling  prices,  and  begin 
to  look  for  the  cause,  and  seek,  if  possible,  a 
remedy  ? 


DISASTROUS  EFFECTS.  3 1 

To  show  how  difficult  it  is  for  the  business  man 
and  farmer  to  detect  or  discover  the  true  cause  for 
falling  prices,  and  how  subtle  and  illusive  that 
cause  is,  I  will  quote  from  the  Report  of  the  Mone- 
tary Commission  of  the  United  States,  page  51  : 

Whenever  and  wherever  the  mutterings  of  discontent 
were  hushed  by  the  fear  of  increased  standing  armies,  the 
foundations  of  society  were  honeycombed  by  powerful  secret 
political  associations.  The  cause  at  work  to  produce  this 
state  of  things  was  so  subtle,  and  its  advance  so  silent,  that 
the  masses  were  entirely  ignorant  of  its  nature.  They  had 
come  to  regard  money  as  an  institution  fixed  and  immovable 
in  value,  and  when  the  prices  of  property  and  the  wages  of 
labor  fell,  they  charged  the  fault,  not  to  the  money,  but  to 
property  and  the  employer.  They  were  taught  that  the 
mischief  was  the  result  of  overproduction,  never  having 
observed  that  overproduction  was  complained  of  only  when 
the  money  stock  was  decreasing;  their  prejudices  were 
aroused  against  labor-saving  machinery.  They  were  angered 
at  capital  because  it  either  declined  altogether  to  embark  in 
industrial  enterprises,  or  would  only  embark  in  them  upon 
the  condition  of  employing  labor  at  the  most  scanty  remu- 
neration. They  forgot  that  falling  prices  compelled  capital 
to  avoid  such  enterprises  on  any  other  condition,  and  for 
the  most  part  to  avoid  them  entirely.  They  did  not  com- 
prehend that  money  in  shrinking  volume  was  the  prolific 
parent  of  enforced  idleness  and  poverty,  and  that  falling 
prices  divorced  money,  capital,  and  labor,  but  they  none  the 
less  felt  the  paralyzing  pressure  of  the  shrinking  metallic 
shroud  that  was  closing  around  industry. 

I'Vom  the  above  f|uotati()n  one  can  sec  that  in 
former  times  men  talked  as  they  do   today,   and 


32  lALLIA'G   PKICllS. 

that  every  man  to-day  has  just  the  same  opinion 
concerning  the  effects  he  sees  resulting  from  con- 
traction of  money  and  the  fall  in  prices.  But 
whether  the  fall  in  prices  to-day  is  the  result  of 
our  nation's  having  contracted  its  volume  of  money, 
or  has  come  from  other  causes,  it  cannot  be  dis- 
puted, either  from  the  testimony  adduced  from 
history,  or  by  actual  experience  of  our  day,  that  the 
result  is  disastrous  to  the  merchant  and  laborer 
alike.  That  beneficial  effects  flow  from  rising 
prices  to  merchants  and  laborers  equally  is  evident. 
Therefore,  in  order  to  restore  prosperity,  the  first 
step  necessary  is  to  study  the  subject  and  ascer- 
tain what  legislation  is  required  ;  to  ascertain  if  it 
be  in  the  power  of  legislation  to  send  prices  up, 
and,  if  not,  then  to  continue  the  search  for  the 
cause  until  found. 

To  show  that  this  fall  in  prices  is  a  very  serious 
matter,  and  that  it  extends  beyond  our  own  country, 
I  will  offer  in  evidence  the  existing  state  of  affairs 
among  the  producing  and  mercantile  classes  in 
England. 

James  Henry  Mallard,  M.  A.,  of  Liverpool,  Eng- 
land, says  : 

Here  also  is  an  eloquent  summary,  by  the  pen,  of  the  evils 
of  low  prices,  —  evils  that  are  largely  traceable  to  the  break 
of  "  exchange." 

What  is  our  position  at  the  present  time?  We  have, 
according  to  the  Chancellor  of  the  Exchequer,  the  "  un- 
speakable blessing  of  low  prices,"  and  side  by  side  with  that 


DISASTROUS  EFFECTS.  33 

we  have  two  million  acres  of  arable  land  gone  out  of  culti- 
vation. We  have  nearly  half  of  our  great  iron  and  steel 
works  closed,  and  out  of  about  five  hundred  tin-plate  mills, 
in  the  manufacture  of  which  we  have  enjoyed  the  monopoly 
of  the  world,  two  hundred  and  thirty  are  idle,  and  have  been 
for  the  last  twelve  months.  We  have  colliers  working  two 
to  four  days  a  week ;  we  have  sixteen  thousand  looms  idle 
in  Blackburn,  three  thousand  in  Preston,  and  I  know  not 
how  many  others  in  different  towns  in  England.  Our  jute 
mills  are  running  intermittently,  and  even  then  at  a  loss; 
we  have  millions  of  tons  of  shipping  lying  idle,  and  our  great 
cotton,  linen,  and  woollen  industries  depending  upon  it  are 
suffering  in  sympathy.  Lead-mining,  tin-mining,  and  cop- 
per-mining have  almost  ceased  in  Great  Britain;  our  great 
chemical  trades  are  in  a  ruinous  condition,  our  paper  trades 
unprofitable,  and  nearly  all  our  great  manufacturing  indus- 
tries in  the  same  dismal  plight.  What  are  the  effects  upon 
labor?  There  has  been  a  reduction,  in  the  corn-growing 
countries  of  England,  of  twenty  per  cent,  in  the  wages  of 
the  agricultural  laborer,  of  nearly  twenty-five  per  cent,  in 
that  of  the  iron  and  steel  workers,  of  thirty-five  per  cent, 
since  1891  in  the  wages  of  the  South  Wales  colliers,  of 
twelve  and  a  half  per  cent,  in  the  wages  of  tin-plate  makers, 
—  such  of  them  who  are  able  to  get  work  at  all, —  and  a 
further  twelve  and  a  half  per  cent,  reduction  is  now  demanded 
by  the  employers,  who  say  (and  I  think  truly)  that  the  alter- 
native is  to  close  their  mills.  The  cotton  operatives  in  Lan- 
cashire, in  1S93,  after  sixteen  weeks'  strike,  submitted  to  a 
reduction  of  three  and  a  half  per  cent.,  but  another  five  per 
cent,  is  now  demanded  by  the  masters,  with  a  threat  to  close 
the  whole  of  the  mills  of  Lancashire,  if  not  conceded.  There 
is  a  threatened  reduction  of  wages  in  the  hosiery  trade  in 
Leicester,  affecting  six  thousand  hands,  and  reductions  are 
in  the  air  all  around.  If  you  talk  to  the  average  employer 
about  the  present  deplorable  i)osition,  his  idea  generally  is 


34  FALLING   PRICES. 

that  \va,!j,cs  must  come  down,  and  I  am  sorry  to  say  that  if 
the  remedy  wliicli  I  advocate  (bimetallism)  is  not  readopted, 
there  is  no  help  for  it ;  wages  must  come  down,  and  come 
down  heavily. 

Without  regard  to  the  opinion  which  Mr.  Ilal- 
lard  holds  as  to  the  cause  of  low  and  falling  prices, 
the  injury  and  suffering,  as  a  matter  of  fact,  in  the 
then  existing  deplorable  condition  of  trade,  and 
loss  to  the  mercantile,  manufacturing,  and  laboring 
community,  is  beyond  dispute,  and  should  certainly 
cause  those  who  are  always  advocating  lower  prices, 
and  consequent  cut-downs,  to  stop  and  consider 
what  the  consequences  must  be  if  the  downward 
trend  of  prices  is  not  checked. 

Over  twenty  years  ago  a  monetary  commission 
was  created  by  Congress,  and  in  its  report,  on  page 
55,  will  be  found  the  following  : 

The  worst  effect,  however,  economically  considered, 
of  falling  prices,  is  not  upon  existing  property  nor  upon 
debtors,  evil  as  it  is,  but  upon  laborers,  whom  it  deprives  of 
employment,  and  consigns  to  poverty ;  and  upon  society, 
which  it  deprives  of  that  vast  sum  of  wealth  which  resides 
potentially  in  the  vigorous  arms  of  the  idle  workman. 
This  estimate  is  not  an  extravagant  one,  that  there  are  now 
in  the  United  States  three  million  persons  willing  to  work, 
but  who  are  idle  because  they  cannot  obtain  employment. 
This  vast  poverty-stricken  army  is  increasing,  and  will  con- 
tinue to  increase  as  long  as  falling  prices  shall  continue  to 
separate  money  capital,  the  fund  out  of  which  wages  are 
paid,  from  labor,  and  to  discourage  its  investment  in  other 
forms  of  property.  .  .  .  Little  more  labor  will  be  employed 
under  these  circumstances  than  is  sufficient  to  support  the 


DISASTKOUS  EFFECTS.  35 

owners  of  capital  on  this  parsimonious  basis  ;  and  as  a 
consequence,  the  labor  market  will  be  overstocked,  and  the 
competition  between  labor  will  reduce  wages  to  a  starvation 
level.  But  during  this  period,  when  property  is  being 
sacrificed  to  meet  current  necessities,  and  laborers  are 
being  remitted  to  idleness  and  destitution,  money  fattens  in 
the  general  disaster. 

This  report  was  made  March  2,  1877.  It 
was  a  commission  that  was  appointed  by  a  Repub- 
lican President,  and  on  which  were  a  majority  of 
Republicans. 

It  should  be  remembered  that  up  to  this  time 
no  Democratic  majority  had  had  a  voice  in  shaping 
government  since  i860,  and  yet  this  practically 
Republican  commission  says,  "  There  are  now  in 
the  United  States  three  million  persons  willing  to 
work,  but  who  are  idle  because  they  cannot  obtain 
employment."  The  importance  of  this  statement 
lies  in  the  fact  that  one  meets  men  who  now  most 
positively  declare  that  this  country  never  had  hard 
times  until  four  years  ago.  No  doubt  these  men 
are  honest  in  their  belief,  but  their  memories 
should  be  cultivated  before  they  make  such  posi- 
tive declarations  to  men  who  have  better  memories, 
growing  out  of  a  sad  experience. 


CHAPTER    III. 

OPINIONS   REGARDING   THE    CAUSE    OF    THE    FALL    IN 
PRICES. 

In  opening  this  chapter,  I  desire  to  call  the 
attention  of  the  reader  to  the  fact  that  the  tables, 
or  Index  Numbers,  used  in  showing  the  fall  in 
prices  cover  the  leading  nations  of  the  earth, 
showing  that  there  must  be  some  great  and  wide- 
spread general  cause.  Further  on  the  writer  will 
quote  the  most  popular  schools  of  writers  and 
authorities,  giving  their  special  reasons  and  opin- 
ions concerning  the  cause  which,  if  applied,  would 
bring  about  a  rise  or  fall  in  prices. 

One  of  the  most  prominent  and  popular  opinions 
prevailing  to-day  is  that  the  fall  in  prices  was 
wholly  due  to  the  lack  of  a  sufficiently  high  pro- 
tective tariff.  This  was  not  only  made  the  issue 
in  the  last  Presidential  election,  but  won  the 
largest  number  of  votes  ;  and,  furthermore,  it  was 
emphasized  by  the  newly  elected  President,  in 
calling  an  extra  session  of  Congress  for  the  sole 
purpose  of  passing  a  high  protective  tariff  measure 
to  raise  prices  and  wages  to  that  plane  on  which 
only,   it  was  claimed,  the  country  could  prosper. 

36 


OP/X/OXS   REGARDIXG    THE    CAUSE.  3/ 

Under  these  circumstances,  the  writer  feels  that 
those  advocating  high  tariff,  for  the  purpose  of 
raising  prices,  are  entitled  to  the  first  place  in 
having  their  views  presented  in  these  pages.  In 
doing  this  I  intend  to  quote  the  ablest  champions 
on  this  question,  and  believing  that  President 
McKinley  stands  as  the  highest  authority  to-day 
upon  the  tariff,  I  will  quote  from  his  speeches, 
made  on  the  floor  of  the  House  and  in  public. 

In  his  speech  before  the  Chautauqua  Association, 
at  Beatrice,  Neb.,  August  2,  1892,  Mr.  McKinley 
said  : 

Mr.  Cleveland,  I  fear,  has  not  consulted  the  markets 
since  1890.  .  .  .  The  value  of  the  report,  the  reading  of 
which  I  commend  to  the  gentlemen,  will  be  seen  when  I 
state  that  it  was  made  by  tlie  following  senators :  Aldrich, 
Allison,  Hiscock,  Jones,  Harris,  and  Carlisle;  and  that  the 
report  is  a  unanimous  one. 

This  report  has  ascertained  and  stated  the  cost  of  food 
and  clothing,  fuel  and  lighting,  house-furnishing,  foods, 
drugs  and  chemicals,  metals  and  implements,  lumber  and 
building  material,  for  each  month,  commencing  June,  1889, 
and  ending  Sept.  i,  1S91.  The  result  of  tiie  investigation, 
which  has  been  most  careful  and  absolutely  non-partisan, 
shows  the  decline  in  the  retail  prices  of  two  hundred  and 
fourteen  selected  articles  of  comfort  and  necessity,  to  be 
2.64  per  cent,  less  by  one  method  of  computation,  and  i.S 
per  cent,  less  by  anotlier,  in  iS(^i,  tlian  during  any  of  liie 
months  preceding  and  covered  by  the  investigation.  The 
committee,  in  addition  to  the  twenty-eight  montiis  noted, 
a.sked  the  Commissioner  of  Lai)or  of  tlie  L^nited  States  to 
a.scertain  the  retail  prices  in  tlirce  cities,  —  namely.  Fall 
River,   Mass.,  Chicago,  111.,  and   I)ubu(iuc,   Iowa, — of  the 


386481 


38  FALLING   PRICES. 

two  hundred  and  fourteen  articles  referred  to.  The  result 
of  his  investigation  shows  a  further  decline  in  the  cost  of 
living,  in  Ma}',  1S92,  as  compared  with  September,  1891, 
of  2.1  per  cent.  This  report  also  shows,  in  every  part  of 
it,  a  constant  tendency  to  lower  prices  of  the  necessaries 
and  comforts  of  life.  This  would  seem  to  dispose  of  Mr. 
Cleveland's  assertion  that  the  tariff  has  increased  prices  to 
the  consumer,  and  leaves  his  statement  devoid  of  that 
essential  element  of  strength,  truth.  .  .  .  Yet  Mr.  Cleveland, 
in  his  recent  speech  in  Rhode  Island,  said :  "  The  consumer 
has  found  life  harder  since  the  passage  of  the  new  tariff 
law  than  before."  This  is  not  true.  The  consumer  has 
not  found  life  harder,  for  the  commodities  which  enter  into 
his  daily  life  are,  in  a  great  majority  of  cases,  lower  than 
they  were  before  the  new  tariff  law  went  into  effect.  lie 
has  cheaper  sugar,  cheaper  clothing,  cheaper  boots  and 
shoes,  and  cheaper  nails  then  before.  A  careful  investiga- 
tion of  prices  of  woollen  and  cotton  goods  made  in  the  city 
of  New  York,  and  embracing  over  two  thousand  quotations 
of  articles,  for  a  comparative  period  under  the  new  and  old 
tariffs  (and  this  was  made  by  an  expert  who  has  reported 
prices  for  forty  years),  shows  that  in  about  98  per  cent, 
of  all  these  quotations  and  articles,  there  has  been  an  actual 
decrease  in  price  since  the  new  tariff  went  into  effect,  as 
compared  with  the  same  prices  of  goods  under  the  old 
tariff. 

Carroll  D.  Wright,  in  his  "  Scientific  Basis  of 
Tariff  Legislation,"   says  : 

The  free-trader  urges  the  adoption  of  free  trade  in  Amer- 
ica, in  order  that  surplus  products  may  be  sold  abroad ; 
and  claims  at  the  same  time  that  "  there  are  scores  of 
profitable  industries  that  cannot  now  be  carried  on  in  this 
country,  on  account  of  the  tariff,  but  which  would  spring 
into  existence  as  soon  as  it  was  removed."     On  the  other 


OPINIONS  REGARDING    THE    CAUSE.  39 

hand,  the  equally  intelligent  protectionist  sa)-s  in  substance, 
"  There  are  scores  of  industries  now  carried  on  because  the 
tariff  does  exist,  that  with  its  removal  would  be  abandoned." 

The  above  shows  how  completely  authorities 
disagree  as  to  the  efficacy  of  free  trade  and  tariff 
in  producing  prosperity  and  high  prices. 

I  will  now  quote  from  a  letter  received  by  Wil- 
liam B.  Allison  from  James  M.  Swank,  general 
manager  of  the  American  Iron  and  Steel  Associa- 
tion, of  Philadelphia,  as  follows  : 

The  effect  of  protective  duties  in  this  country  has  been 
invaluable  to  reduce  prices  after  the  protected  industries 
have  been  established ;  and  there  is  no  reason  known  to  us 
why  the  manufacturer  of  tin-plate  should  prove  to  be  an  ex- 
ception to  this  rule. 

It  must  be  remembered  here  that  I  am  not  ar- 
guing on  the  merits  or  demerits  of  tariff  or  free 
trade,  or  on  their  effects  in  encouraging  industries. 
Hoth  sides  claim  that  their  respective  policies  will 
do  this,  and  both  are  also  agreed  that  each  of  their 
systems  will  bring  lower  prices  in  the  end.  In  ac- 
knowledging this,  we  may  rest  assured  that  neither 
will  advance  prices  ;  and  it  is  to  this  that  all  men 
in  trade  look  with  hopeful  eyes  as  causing  the 
return  of  prosperity. 

What  is  needed  in  this  nation  to  restore  confi- 
dence is  legislation  which  will  st(jp  the  fall  in 
prices  ;  and  it  has  been  demonstrated  that  neither 
high  nor  low  tariff  will  do  it,  for  the  country  has 
given  both  a  fair  trial  during  the  past  thirt)'  years. 


40  FALLING   PRICES. 

The  McKinley  high-tariff  bill  was  in  full  operation 
when  the  Wilson  low-tariff  bill  was  passed.  No 
one  can  deny  that  values  had  a  terrible  tumble  un- 
der the  McKinley  bill.  We  then  went  under  the 
Wilson  bill,  and  still  values  fell  ;  and  to-day  we 
are  under  the  Dingley  high-tariff  bill,  and  still  val- 
ues are  falling. 

Mr.  McKinley  proved,  by  taking  two  hundred 
and  fourteen  commodities  as  examples,  that  prices 
fell,  under  the  operation  of  his  bill.  We  know 
it  fell,  under  the  Wilson  bill,  and  we  are  still  suffer- 
ing from  the  fall  in  prices  under  the  new  Dingley 
bill  ;  hence  we  have  the  demonstrated  fact  that  the 
cause  of  falling  prices  lies  deeper  than  what  tariff 
or  free  trade  will  reach  or  cure. 

Having  the  acknowledgment  of  both  free-trader 
and  protectionist  that  prices  fall  under  their  sys- 
tems, and  also  having  seen  it  demonstrated  during 
the  past  thirty  years,  and  to  the  loss  of  the  busi- 
ness interest  of  the  country  at  large,  I  am  now 
forced  to  look  to  the  next  largest  party  to  ascer- 
tain what  in  their  opinion  will  cause  prices  to  ad- 
vance. 

This  second  school  which  we  are  to  consider 
leads  us  to  study  the  effect  which  a  large  or  small 
volume  of  money  has  upon  prices ;  and  in  consid- 
ering this  remedy  for  falling  prices,  we  shall  quote 
not  only  the  authorities  at  the  head  of  our  institu- 
tions of  learning  in  this  country  which  teach  polit- 
ical economy,  but  also  those  from  all  parts  of  the 


OPINIONS   REGARDING    THE    CAUSE.  4 1 

globe.  One  striking  fact  in  regard  to  this  ques- 
tion of  volume  in  currency  as  affecting  the  rise 
and  fall  of  prices,  is  the  unanimity  of  opinion  of 
all  authorities  from  Aristotle  down.  This  one 
fact,  it  would  seem,  should  entitle  these  authori- 
ties to  our  earnest  and  careful  consideration. 

In  opening  the  case  in  regard  to  the  cause  of 
falling  prices,  we  selected  the  greatest  acknowl- 
edged authority  in  the  land  upon  the  subject  of 
tariff,  Mr.  William  McKinley.  In  introducing  the 
subject  of  the  volume  of  money  to  account  for 
the  same  cause,  I  will  quote  from  the  writings  of 
the  late  lamented  Francis  A.  Walker,  Ph.  D., 
LL.  D.,  president  of  the  Massachusetts  Institute 
of  Technology.  In  his  great  work  entitled  "  Po- 
litical P^conomy,"  he  writes  as  follows  : 

Now,  this  is  money  function.  Money  is  the  medium  of 
exchange.  Whatever  performs  this  function,  does  this 
\vori<,  is  money,  no  matter  what  it  is  made  of,  and  no  mat- 
ter how  it  came  to  be  a  medium  at  first,  or  why  it  continues 
to  be  such.  So  long  as,  in  any  community,  there  is  an  ar- 
ticle which  all  producers  take  freely,  and  as  a  matter  of 
course,  in  exchange  for  wliatever  they  have  to  sell,  instead 
of  looking  about  at  the  time  for  tlie  particular  things  they 
themselves  wish  to  consume,  that  article  is  money,  —  be  it 
white,  yellow,  or  black,  hard  or  soft,  animal,  vegetable,  or 
mineral,  in  its  composition. 

The  great  forces  lining  up  between  the  ICasl  and 
the  West  and  South,  lor  the  grciiL  halllc  to  be 
fought  upon  the  (|iieslioii  ol    money  in    1900,   are 


42  FALLING   PRICES. 

of  such  a  character  as  to  entitle  their  opinion  to 
consideration  beyond  that  of  most  other  agencies 
in  accounting  for  the  fall  in  prices. 

We  are  not  now  dealing  with  the  quality  of 
money,  of  kinds  of  metals,  of  weight,  or  of  fine- 
ness ;  we  are  dealing  wholly  with  volume  and  its 
effect  upon  other  things. 

I  will  start  out  with  the  accepted  belief  of  all,  — 
that  the  more  money  the  people  issue,  the  more 
they  will  have  to  give  of  it  for  that  which  they  buy. 
I  think  we  all  stand  committed  to  this  fact,  —  a 
fact  attested  by  the  experience  of  this  country  and 
of  all  others  when  issuing  large  volumes  of  money. 

In  order  to  put  this  beyond  question,  I  will 
quote  from  Jf)hn  Stuart  Mill,  who  said  :  "  If  the 
whole  money  in  circulation  was  doubled,  prices 
would  double.  If  it  was  only  increased  one-fourth, 
prices  would  rise  one-fourth,  .  .  .  every  increase  in 
quantity  lowering  its  value,  and  every  diminution 
raising  it  in  a  ratio  exactly  equivalent." 

Touching  this  point,  Ricardo  says  :  "  That  com- 
modities would  rise  and  fall  in  price  in  proportion 
to  the  increase  or  diminution  of  money,  I  assume 
as  a  fact  that  is  incontrovertible.  That  such 
would  be  the  case  the  most  celebrated  writers  on 
political  economy  are  agreed." 

I  fully  agree  with  the  above  authorities  that  rise 
and  fall  in  money,  or  cheap  and  dear  money,  af- 
fects all  other  values  outside  of  money  ;  and  also 
that  the  cheaper  the  dollar,  the  more  dollars  we 


OP/iVIONS  REGARDIXG    THE    CAUSE.  43 

shall  be  compelled  to  give  for  whatever  we  pur- 
chase, in  exact  ratio  to  the  increase  of  them.  But 
there  is  one  fact  overlooked  by  the  man  who 
thinks  he  has  an  argument  which  will  frighten  the 
people  when  going  out  to  "shop,"  —  namely,  that 
somebody  gets  this  double  number  of  cheap  dol- 
lars. Now,  let  us  see  who  receives  these  cheap 
dollars.  The  cotton  planter  is  receiving  five  cents 
per  pound  for  his  cotton  in  dear  dollars  ;  but  in 
the  era  of  cheap  ones,  the  buyer  pays  him  two 
dollars  in  place  of  one.  So  that  the  planter  who 
was  compelled  in  the  one  case  to  sell  his  croj)  for 
JS500,  would  in  the  other  receive  $1,000.  Every- 
body, whether  rich  or  poor,  will  accept  this  fact. 
Now,  the  planter  has  a  ten  years'  mortgage  on 
which  he  pays  Eastern  and  luigHsh  bankers  $250 
interest  per  annum.  With  dear  money,  it  took 
one-half  his  entire  crop  to  pay  this  interest,  leav- 
ing him  only  i^2  5o  ;  but  with  the  cheap  money  he 
sends  the  $250,  deducted  from  his  $1,000  of  cheap 
money,  which  leaves  him  $750,  instead  of  $250 
under  dear  money. 

The  same  ])rinci|)le  holds  good  when  applied  to 
wheat,  or  to  any  commodity,  or  to  labor.  Double 
the  number  of  d(jllars  must  be  given  to  all  classes 
by  the  money-class,  if  the  dollars  are  one-half 
cheaper. 

James  G.  Blaine  once  said:  "You  cannot  add 
wealth  to  a  nation  l)y  adding  money.  If  )'ou 
double  the  amount  of  currency,  everything  you  buy 


44  FALLING   PRICES. 

will  cost  you  double  in  price."  Mr.  Blaine  told 
the  truth  so  far  as  he  went ;  but  he  did  not  take 
the  producing  classtis  into  his  confidence,  and 
whisper  this  truth  in  their  ear,  —  that  they  alone 
get  the  double  amount  of  dollars ;  that  when  you 
pay  a  man  dollars  for  dollars  received,  you  pay 
him  dollar  for  dollar.  No  matter  whether  it  is  a 
so-called  fifty-cent  dollar,  or  whether  it  is  a  300- 
cent  dollar,  the  rich  man  gets  but  one,  as  he  deals 
in  dollars  only ;  but  the  laborer  gets  two  dollars 
for  one,  as  the  price  of  his  wages  double,  measured 
by  cheap  or  fifty-cent  dollars. 

This  is  the  design  of  the  system  of  expanding 
and  contracting  the  currency  ;  but  those  designing 
it  never  thought  for  an  instant  that  the  people 
would  become  informed  upon  this  trick,  which  has 
been  played  upon  the  world  for  centuries.  It 
worked  well  so  long  as  the  rich,  after  having  put  a 
blanket  of  debt  upon  the  people,  could  contract 
the  volume  of  money,  cause  thereby  panic  and  fall 
of  prices,  and  then  scoop  in  the  wealth  created  by 
the  people.  But  to  have  the  tables  turned  upon 
the  rich  by  the  people,  who,  having  discovered  the 
fraud  of  contracting  the  currency,  in  turn  proceed 
to  expand  it,  —  this  was  a  movement  very  unex- 
pected on  the  part  of  the  moneyed  class. 

To  prevent  this  turn  of  affairs,  all  of  Europe, 
led  by  England  and  backed  by  the  moneyed  aris- 
tocracy of  this  country,  unite  to  prevent  us  adding 
another  dollar  of   legal  tender  to  our  volume  of 


OF/iVIOA'S  REGARDING    THE    CAUSE.  45 

money,  except  in  gold,  without  international  per- 
mission. This  same  money  power,  having  gotten 
possession  of  the  people's  property  through  the 
systems  taught  by  the  standard  authorities  of  the 
world,  now  turn  upon  these  authorities  for  instruct- 
ing the  people  how,  by  reversing  the  present  sys- 
tem, they  can  in  time  regain  their  lost  possessions. 
This  the  rich  do  by  dismissing  teachers  from  high 
and  honored  positions  in  our  institutions  of  learn- 
ing. We  have  seen  it  done  within  the  past  few 
years,  in  instances  where  men  of  the  profoundest 
knowledge  and  learning  have  been  asked  to  resign 
for  allowing  their  patriotism  and  love  of  humanity 
to  rise  higher  than  their  love  of  ambition  and  gold. 
It  is  this  power  and  bitterness  of  the  moneyed 
class  used  against  these  good  and  true  men  which 
has  opened  the  eyes  of  thousands  to  a  suspi- 
cion that  there  is  something  evil  in  that  system 
of  money  by  which  the  rich,  without  detection, 
have  transferred  the  nation's  wealth  to  their  own 
pockets  ;  and  once  their  suspicion  is  aroused,  the 
people  begin  to  study  the  subject  with  a  view  to 
discover  how  this  evil  may  be  removed. 

The  "silver  movement"  is  an  effort  to  increase 
the  volume  of  our  currency  to  raise  prices,  more 
than  it  is  to  use  the  American  commodity  of 
silver.  Probably  two-thirds  of  those  in  the  silver 
ranks  would  have  neither  silver  nor  gold  as  money  ; 
but  until  the  pc()j)le  can  be  enlightened  upon  the 
purposes  for  which  money  was  designed,  these  ad- 


46  FALLJAG    PKJCES. 

vanccd  minds  arc  compelled  to  keep  back  with  the 
main  army  in  order  to  be  effective  in  numbers. 
There  can  be  no  advantage  to  the  American  peo- 
ple in  using  their  silver  for  money  when  all  the 
great  authorities  say  paper  money  will  do  the 
same  work.  By  so  doing  we  could  ship  silver  to 
Europe  (and  also  gold)  to  people  less  enlightened 
on  money,  in  exchange  for  tea  and  coffee,  instead 
of  sending  our  wheat  and  cotton ;  but  by  using 
gold  for  money,  and  not  having  one-hundredth  part 
enough  of  it,  we  are  constantly  sending  our  bonds 
and  securities  to  Europe  to  purchase  and  re-pur- 
chase, as  it  is  always  returning  them.  If  we  had 
a  money  of  our  own,  as  we  had  from  i860  to 
1880,  it  would  stay  at  home,  and  all  the  gold  and 
silver  we  mined  would  be  just  so  much  wealth 
gained,  while  now  it  is  just  that  much  lost.  Or, 
in  other  words,  it  would  prevent  a  contraction  of 
the  nation's  money,  —  the  result  of  which,  accord- 
ing to  all  great  authorities,  causes  a  fall  in  prices 
and  a  dei^ression  of  trade.  We  could  then  have  a 
fixed  volume  of  currency,  —  so  many  dollars  per 
capita,  —  and  have  fixed  and  steady  prices,  as  the 
money  would  not  be  redemption  money.  It  would 
be  like  our  greenback  money,  say,  from  1862  until 
1869,  not  redeemable;  and  not,  practically,  even 
until  1879.  If  contraction  is  the  cause  of  falling 
prices,  and  falling  prices  the  cause  of  loss  to  mer- 
chants who  are  carrying  goods  (and  all  authorities 
agree  upon  this  latter  assertion),  and  also  a  loss 


OPIiVIOXS   REGARDIXG    THE    CAUSE.  4/ 

to  the  laboring  classes  by  being  in  consequence 
thrown  out  of  employment  and  forced  to  consume 
the  little  earnings  they  have  saved,  —  thus  being 
always  kept  down  and  held  back,  until  at  last  they 
get  discouraged  and  give  up  all  ambition  and 
hope, — if  all  these  results  flow  from  the  contrac- 
tion of  the  currency,  then  surely  it  is  an  evil  which 
we  should  earnestly  study  to  abate. 

That  there  shall  be  no  question  in  regard  to  the 
claim  that  contraction  has  taken  place,  to  which  is 
attributed  the  fall  of  prices,  I  now  present  the 
following  table  showing  all  moneys  in  circulation 
(exclusive  of  coin),  as  taken  from  the  book  of  the 
Treasury  Department  on  Sept.  i,  1S65  : 

United  States  Notes $433,160,569.00 

Fractional  Currency 26,344,742.00 

National  ]'>ank-notes 185,000,000.00 

Compound  Interest  I.egal-tender  Notes  217,024,160.00 
Temporary  Loan  Certificates  (lo-d-d)  .  107,148,713.00 
Certificates  of  Indebtedness  ....  85,093,000.00 
Treasury  P'ive  Per  Cent.  Legal  Tenders  32,536,991.00 
Treasury  Notes,  Past  Due,  Legal  Ten- 
ders and  not  presented 1,503,020.00 

State  P>ank-notes 78,867,575.00 

Three  Years'  Treasury  Notes    ....  830,000,000.00 

$1,996,678,770.00 

The  above  table  shows  the  amount  of  the  na- 
tion's circulating  medium  in  1.S65  to  be  $1,996,- 
678,770.  The  population  of  the  country  at  that 
time  was  about  thirty  millions,  wliich  would  give 
the  nation  a  per  capita  circulation  of  $66.55.  ^^ 
must  be  remembered,  however,  that  the  war  was 
brought  to  a  close  during  tlie  year  1865,  and  that 


48  FALLING   PRICES. 

previous  to  that  time  there  were  nine  States,  with 
nine  millions  of  population,  out  of  the  Union,  — 
leaving  only  twenty-one  millions,  among  which 
the  $1,996,678,770  should  be  divided,  which  would 
give  a  circulation  of  $99.84  per  capita  to  the  people 
of  the  Northern  States. 

Many  men  belong  to  the  income  class,  and,  hav- 
ing no  property  or  commodities  on  hand  to  shrink 
in  value,  they  find  it  in  their  interest  to  advocate 
the  contraction  of  our  currency  to  its  very  small- 
est possible  limit.  These  men  usually  try  to  rep- 
resent the  amount  of  the  nation's  currency  as 
small  as  possible  during  the  war,  when  prices 
were  high,  and  as  large  as  possible  to-day,  when 
prices  are  low.  To  accomplish  this  they  claim 
that  the  7-30  legal-tender  notes  were  not  money, 
but  bonds  ;  and  as  there  were  $830,000,000  of 
them  issued,  they  can  by  so  doing  considerably 
reduce  the  per  capita  of  circulation.  But  to  mor- 
tify and  humiliate  them  in  this  barefaced  attempt 
to  mislead  those  who  have  not  the  opportunity  to 
study  up  the  matter,  it  is  only  necessary  to  quote 
authorities,  —  one  from  a  letter  written  by  a  presi- 
dent of  a  national  bank,  and  also  a  member  of  the 
Forty-third  Congress  : 

Office  of  First  National  Bank. 

New  Jersey,  August  12,  1878. 
In  compliance  with  your  request  of  the  iSth  inst.,  that  I 
would  define  the  relative  position  of  the  7-30  treasury  notes 
to  the  general  volume  of  currency  in  1865, 1  have  to  say  that 


OF/AVOA'S   REGARDIA'G    THE    CAUSE.  49 

I  was  then  daily  in  the  habit  of  receiving  and  paying  out 
the  same  in  the  conduct  of  my  ordinary  business,  the  same 
as  greenbacks ;  and  I  esteem  their  peculiar  characteristics 
(being  conducive  of  elasticity)  as  not  only  forming  a  cur- 
rency, but  a  currency  of  special  merit. 

Amos  Clark. 

Another  standard  authority  writes  :  — 

Sirs,  —  Your  letter  of  the  15th  inst.  has  been  received. 
In  answer  I  have  to  say  that  the  7-30  notes  were  intended, 
prepared,  issued,  and  used  as  money. 

^'ery  respectfully  yours, 

F.  E.  Spinner. 

Secretary  IMcCidlough,  in  his  report  for  Decem- 
ber, 1865,  included  the  seven-thirties  in  his  settle- 
ment of  $2,000,000,000  of  outstanding  currency. 
President  Grant,  in  his  message  of  Dec.  2, 
1873,  refers  to  them  as  being  legal  tenders,  and 
held  as  reserves  by  the  national  bank.  Under 
the  law,  the  national  bank  must  hold  legal-tender 
money  as  their  reserves. 

The  claim  of  the  authorities  previously  quoted, 
asserting  that  increase  of  money  in  a  nation  will 
increase  prices,  is  clearly  substantiated  in  the  fore- 
going table,  showing  as  it  does  such  a  large  volume 
of  currency  ;  and  right  here  comes  in  a  very  signif- 
icant and  coinciding  fact,  which  is  tliat  the  tal)le 
of  the  New  York  market  price,  for  ten  leading 
commodities,  taken  from  the  New  York  Tribune  s 
market  report  for  January,  1865,  shows  the  highest 
j)rices    for    the    ])ast    thirty    years.      I'rices    ruled 


50  FALIJA'C   J'A'/CKS. 

higlier  in  the  fall  of  1864  than  they  did  in  the 
fall  of  1865,  and  it  was  owing  to  the  fact  that 
all  our  currency  was  confined  to  the  North  until 
the  fall  of  1865,  when  it  was  circulated  through- 
out the  whole  nation. 

The  full  force  of  these  facts  and  figures,  how- 
ever, cannot  be  demonstrated  until  1  show  the 
anioLuit  of  the  nation's  circulating  medium  in 
1873.  The  circulating  medium  of  the  country, 
exclusive  of  coin,  Dec.    i,    1873,  was  as  follows  : 

United  Slates  notes         ......  $367,001,685 

Fractional  currency         ......  48,000,000 

Certificates  of  indebtedness  bearing  interest           .  678,000 

National  Bank  currency          .....  350,000,000 


$765,679,685 


It  will  be  seen  by  the  above  table  that  our  vol- 
ume of  currency  was  diminished  $1,230,999,085 
during  a  period  of  eight  years.  This  brings  us  up 
to  1874,  lacking  one  month.  Now  let  us  examine 
the  Tribune  market  reports  for  1875,  which  are  a 
little  lower  than  those  of  1874,  as  prices  were 
gradually  falling  every  year.  Here  it  will  be  seen 
that,  with  that  rapid  contraction  of  the  volume  of 
money,  prices  fell  in  the  same  ratio. 

Note. —  The  following  chart  shows  the  ratio  existing  between 
the  volume  of  money  in  the  country  and  the  average  prices  of 
nine  commodities  taken  from  the  New  York  Trilmjtc's  market 
report  for  thirty  years,  commencing  with  1865.  The  nine  com- 
modities are,  copper,  wheat,  cotton,  beeves,  dressed  hogs,  wool, 

lead,  pig  iron,  and  leather.     The  dotted  line  ( )  shows 

the  course  of  prices  on  the  nine  commodities,  while  the  solid  line 
{ )  shows  the  increase  or  decrease  of  volume  of  money. 


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52  /■ALL/AC   PKfCES. 

While  the  lines  in  the  chart  tlo  not  show  a  simul- 
taneous conformity  in  change  of  prices  of  commod- 
ities to  the  change  in  volume  of  currency,  it  does 
show  the  effect  a  little  later  on.  The  fall  in  prices 
is  never  felt  for  a  year  or  two  after  the  withdrawal 
of  currency.  This  is  explained  in  the  action  of 
the  mercantile  community,  which  usually  extends 
credits  at  such  times,  and  uses  mercantile  papers, 
thus  substituting  bank  credits  for  money.  This 
can  go  on  for  awhile,  until  the  banks  become  so 
inflated  with  credits  that  the  large  and  strong 
banks  call  in  their  loans.  Then  panic  ensues,  as 
in  1873  and  1893,  and  the  merchandise  which  has 
been  bolstered  up  by  the  credit  of  banks  is  now 
let  down  to  rest  upon  its  natural  base,  —  that  is, 
the  volume  of  actual  money  circulating. 

It  is  often  the  case  that  merchandise,  especially 
that  of  a  perishable  nature,  during  a  panic  sinks 
below  the  currency  measure  of  it ;  in  such  cases  it 
soon  comes  up  to  its  line  of  level  with  currency. 
Practically  it  did  not  go  below  the  ratio  of  the  cir- 
culation and  price  line,  as  during  panics  money  is 
locked  up,  and  for  awhile  is  artificially  withdrawn 
from  circulation.  This  is  usually  reflected  in 
prices.  It  is  no  unusual  thing  to  see  money  run 
up  to  fifty  and  seventy-five  per  cent,  per  annum 
during  a  panic.  Surely,  money  is  not  circulating 
under  such  abnormal  conditions,  and  cannot,  at 
such  times,  measure  prices  any  more  than  supply 
and  demand  ;  for  no  business  man  would  buy  cash 


OP/iV/OXS   REGARDIXG    THE    CAUSE.  53 

goods,  no  matter  how  low  offered,  if  he  had  notes 
coming  due  which  he  could  barely  see  his  way 
clear  to  meet. 

There  is  one  very  important  fact,  developed  by 
the  above  table  of  prices,  which  I  desire  to  impress 
upon  the  reader's  mind,  which  is  that  gold  does 
not  rule  or  measure  prices.  There  was  not  an 
advocate  of  specie  payment,  in  1875,  ^"  Congress, 
on  the  rostrum,  or  in  the  daily  press,  who  did  not 
most  positively  declare  that,  on  Jan.  i,  1879,  when 
the  nation  resumed  specie  payment,  prices  would 
strike  "bed  rock,"  and,  like  gold,  would  not  vary 
in  the  least,  so  long  as  the  government  maintained 
specie  payment,  or  "honored  its  promises  to  pay." 
The  chart  shows  that  prices  slid  down-hill  over  the 
period  of  1879,  '^s  if  the  rails  had  been  greased, 
and  have  not  stopped  to-day.  Now,  if  down-hill 
prices  could  not  be  stopped  at  1879,  when  the 
nation  struck  a  gold  basis,  where  is  the  man  to-day 
who  dares  to  wreck  his  reputation  by  asserting 
that  we  are  now  at  the  bottom  of  prices  .' 

It  will  be  noticed  that  the  dotted  line  docs  not 
run  quite  as  low  on  the  chart  as  the  line  indicating 
contraction.  This  is  accounted  for  on  the  same 
principle  as  that  in  which  bank  credits  play  a  part 
for  a  time,  —  that  is,  as  an  artificial  value.  It  will 
be  noticed  that  the  articles  of  copper,  beeves,  hogs, 
iron,  and  leather  have  been  cornered  by  trusts, 
while  up  to  the  year  1895,  at  which  my  table 
closes,    cotton,    wheat,    and    worjl    were    the    only 


54  FALLliXG   PRICES. 

articles  the  value  of  which  rested  with  full  weight 
ujxiu  the  volume  of  money  in  circulation.  When 
the  greenbacks  were  issued,  measuring  these  com- 
modities, they  rose  so  rapidly  in  conformity  to  the 
increased  volume  of  money  that  there  were  no 
trusts  controlling  commodities,  for  none  were 
needed,  as  prices  were  constantly  advancing  and 
making  all  the  holders  rich.  Those  were  the  days 
when  "small"  men  owned  the  country,  and  it  was 
not  until  the  money  had  been  destroyed  and  prices 
began  to  fall  that  "  small "  men  were  driven  to  the 
wall,  and  the  large  ones  began  centralizing  capital 
and  cornering  the  whole  output  of  a  commodity. 
This  of  course  put  an  artificial  price  on  such  com- 
modity, when  it  left  the  level  of  measurement  it 
had  formally  occupied,  and  as  prices  kept  falling. 
Almost  every  necessity  in  common  use  has  one  by 
one  been  fastened  upon,  and  forced  up  to  a  paying 
level  for  the  trust  magnates.  These  commodities 
have  not  only  been  put  upon  an  artificial  market 
value,  but  the  men  who  must  purchase  have  been 
reduced  in  the  prices  of  the  products  they  sell  the 
trust  ;  and  all  labor  has  been  laid  off  to  stop  out- 
put, and  in  their  want  the  wage-earners  have  been 
compelled  to  submit  to  reductions  in  wages, —  show- 
ing clearly  that  the  trust  is  a  disturbing  agency  in 
both  the  commercial  and  social  body  politic. 

Since  we  hear  so  much  to-day  about  gold  and 
silver  in  use  in  commerce  and  trade,  I  desire  to 
call  attention  to  this   vital   fact,   that,   during  all 


OP/A/OiVS  REGARDIA'G    THE    CAUSE.  55 

these  years,  the  silver  dollar  was  considered  a  more 
honest  money  than  the  gold  dollar.  Gold  and  sil- 
ver, during  this  i)eriod,  became  a  commodity,  and 
were  bought  and  sold  on  the  street  as  such.  They 
were  no  longer  a  measure  of  value ;  for  while  a 
man  was  forced  to  go  out  on  the  street  and  pay 
$2.85  for  a  gold  dollar,  and  $2.88  for  a  silver  dol- 
lar, and  with  this  he  could  only  pay  one  dollar  of 
debts,  which  he  could  do  with  a  greenback,  he 
had  no  further  use  for  gold  or  silver,  so  far  as  com- 
merce and  trade  was  concerned. 

Those  who  claim  that  higher  prices  constitute 
the  only  basis  on  which  to  build,  in  our  anxiety  for 
better  times,  claim  also  that  higher  prices  can  only 
be  brought  about  by  an  increase  in  the  volume  of 
money,  and  not  in  the  kind  or  cpiality  of  money. 
Probably  nine-tenths  of  the  so-called  "free  silver" 
advocates  favor  the  free  coinage  of  silver,  knowing 
that  it  will  double  our  volume  of  metal  money,  and, 
as  a  result,  double  the  prices  of  all  jiropcrty  and 
commodities,  as  did  the  increase  in  currency  up  to 
1865. 

To  prove  that  rising  jiriccs  bring  prosperity,  I 
now  quote  from  Walker's  "  M(jney,  Trade,  and 
Industry,"  as  follows  : 

It  is  clear  that  an  increase  of  the  money  supply  may 
afford  just  the  incentive  to  enterprise,  and  even  to  specula- 
tion, in  the  best  sense  of  the  word,  —  that  is,  the  anticipa- 
tion of  the  future,  —  which  may  be  sufficient  to  break  through 
the  crust  of  custom,  to  cause  men  to  undertake  these  costly 


$6  FALLIXG   PRICES. 

experiments,  to  encounter  these  initial  risks  and  search  out 
new  channels  for  productive  energy.  And  still  bear  in 
mind  our  assumption  that  if  the  new  supplies  are  received 
evenly  and  not  too  rapidly,  such,  in  greater  or  less  degree, 
ascending  to  the  temperament  and  the  industrial  genius  of 
each  people  concerned,  will  almost  certainly  be  the  effect 
produced.  .  .  .  "Alterations,  therefore,  in  the  cost  of  the 
production  of  the  precious  metals,"  says  Mr.  Mill,  "do  not 
act  upon  the  value  of  money,  except  just  in  proportion  as 
they  increase  or  diminish  its  quantity,"  which  cannot  be 
said  of  any  other  commodity. 

That  money  can  be  increased,  and  raise  prices, 
and  start  business,  without  the  aid  or  use,  of  metals 
as  a  basis,  there  seems  to  be  no  longer  any  ques- 
tion among  the  authorities  on  money.  In  regard 
to  this,  Walker,  in  the  same  book  from  which  I 
have  just  quoted  (page  198),  says  : 

Can  government,  in  fact,  secure  for  its  paper  issues 
such  currency,  such  free  and  general  acceptance,  that  they 
will  do  the  money  work,  and  hence  become  the  money 
thing  ? 

On  this  point  there  can  be  no  question.  Governments 
have  frequently  issued  paper  money  without  adequate  provi- 
sions for  its  redemption  in  gold  or  silver,  —  without  such 
redemption,  in  fact,  taking  place,  and  sometimes  without 
redemption  being  promised,  —  and  yet  that  paper  money 
has  circulated  as  rapidly  as  gold  and  silver  would  have 
done,  has  been  taken  as  freely  in  exchange  for  commodities 
and  services,  and  even,  in  some  instances,  has  maintained 
an  actual  value  equal  to  that  of  the  amount  of  the  precious 
metals  to  which  it  was  nominally  equivalent. 

Berkey,  in  his  "The  Money  Question,"  says: 


OPnV/OA'S  REGARDIXG    THE    CAUSE.  57 

From  an  early  period,  then,  money  came  to  derive  its 
power,  as  an  agent  to  represent  measure  and  exchange 
value,  from  public  authority.  Individuals  and  nations  seek 
to  exchange  and  accumulate  property  and  commodities,  and 
money  is  desirable  only  on  account  of  the  power  with  which 
it  is  clothed  by  public  authority  to  command  property  or 
labor.  It  is  not  useful  of  itself,  for  it  cannot  be  used  as 
food,  or  clothing,  or  shelter.  It  must  be  parted  with  before 
any  service  or  value  can  be  obtained  from  it.  In  an  accu- 
mulated form,  as  capital,  it  can  bring  no  income  until  it  is 
put  to  use,  parted  with.  It  is,  therefore,  the  immaterial 
principle  or  power  to  represent  value  that  is  the  essence  of 
money  ;  and  this  it  can  only  derive  from  law.  "  Money  is 
then,"  in  the  language  of  Kellogg,  "  a  legal  existence,  be- 
ing constituted  a  national  representative  of  property;  con- 
sequently, it  is  a  public  lien  on  all  properly  for  sale  in  the 
nation,  a  public  medium  for  the  exchange  of  products,  and 
a  tender  in  payments  of  debts." 

That  the  American  people  have  the  right  to  in- 
crease or  dimini.sh  their  volume  of  money  is  beyond 
question  ;  for  who  is  there  to  question  the  Ameri- 
can people's  right  to  administer  the  affairs  of  their 
own  nation  .-* 

That  any  question  of  honesty  should  arise  in 
regard  to  the  material  on  which  the  dollar  is 
stamped,  would  seem  to  be  unnecessary.  If  any 
question  of  advantage  or  disadvantage  to  conflict- 
ing interests  should  arise,  it  must  be  in  regard  to 
volume,  and  nf)t  over  the  material  ;  for  it  is  tlie 
volume  which  causes  the  rise  and  fall  in  the  i)ur- 
chasing  power  of  money,  as  is  shown  in  the  case 
of  our  own  government  issues  durin;r  the  war  from 


58  FALLING   PRICES. 

1 86 1  until  1865,  —  prices  advancing  in  ratio  to 
the  amount  of  currency  issued,  and  afterward  fall- 
'\w^  in  exact  proportion  to  the  contraction  of  the 
same. 

In  order  to  make  this  clear,  I  will  quote  from 
"  'J'he  Money  Question,"  by  15erkey  : 

As  money  is  a  legal  public  medium  of  exchange,  pos- 
sessing representative  value,  it  is  not  necessary  that  the 
material  of  which  it  is  made  should  possess  intrinsic  or 
commercial  value.  To  use  again  the  language  of  the  author 
last  quoted  [Kellogg],  "the  value  of  money  perpetually  de- 
pends upon  its  power  to  represent  value,  and  not  upon  its 
material,  because  money  never  reaches  a  point  at  which  it 
can  be  used  as  an  article  of  actual  value."  The  value  of 
the  material  can  add  nothing  to  its  power  as  money;  it  can 
only  render  its  value  more  certain,  —  as  when  money  is 
issued  by  a  weak  and  irresponsible  government,  or  by  a 
nation  possessing  few  or  no  products  for  which  it  can  be 
exchanged.  When  issued  by  a  stable  and  responsible  gov- 
ernment, whose  people  possess  ample  property  and  valuable 
products,  its  value  coiTcsponds  to  the  value  of  the  products 
of  the  country  for  which  it  can  be  exchanged. 

Thus  far  I  have  shown  what  the  authorities  claim 
will  result  from  an  increase  of  currency,  —  that  is, 
a  general  rise  in  prices ;  and  this  the  advocates  of 
a  larger  volume  of  currency  desire,  believing  that 
the  stimulus  of  advancing  market  prices  will  bring 
prosperous  times. 


CHAPTER    IV. 

MONEY,    ITS    USE    AND    ABUSE. 

In  treating  the  question  of  money,  nearly  all 
writers  go  back  to  the  beginning  of  its  history. 
They  go  into  infinite  detail  as  to  its  first  appear- 
ance ;  as  to  the  multitudinous  kinds,  forms,  and 
designs  of  money  which  have  been  used  by  dif- 
ferent nations  at  different  periods  of  the  world's 
history ;  as  to  the  various  kinds  of  material  which 
have  passed  for  money,  —  all  this,  until  the  reader 
has  become  tired  out  with  the  subject  before 
entering  upon  that  in  which  he  is  most  interested; 
namely,  to  know  the  most  practical  material,  for 
wear  and  convenience,  the  amount  needed  per 
capita,  and  the  effect  of  a  larger  or  smaller  circu- 
lation upon  commerce,  trade,  and  labor,  —  in 
short,  to  know  the  essential  nature  and  functions 
of  money. 

The  day  has  gone  by  for  the  banker  to  assume 
that  he  not  only  knows  all  about  money,  but  that 
he  must  be  allowed  to  do  all  the  talking  regarding 
it.  The  practical  business  man  of  to-day  can  no 
longer  be  pushed  aside,  as  not  having  the  brains 
of  a  bank  i)resident  or  director.  The  i)usiness 
man  of  to-day  is  very  different  from  the  business 

59 


6o  FALLING   PRICES. 

man  of  five  hundred  years  ago.  He  has  different 
environments  ;  he  is  doing  business  in  a  made-over 
world  ;  and  to-day  he  asks,  not,  What  was  the 
money  of  the  ancients  ?  or,  What  is  the  money  of 
other  nations  to-day  ?  but,  What  is  the  best  ma- 
terial for  service,  for  convenience  in  handling,  and 
the  least  expensive  ?  Therefore,  in  discussing  this 
question  of  money,  I  shall  start  from  the  most 
advanced  thought  regarding  its  usefulness  in  the 
special  function  of  facilitating  exchanges  in  com- 
merce and  trade  as  an  instrument  of  association. 

Civilization  has  attained  that  degree  of  advance- 
ment, through  ages  of  growth,  when  man  no 
longer  depends  upon  keeping  his  valuables  and 
money  belted  around  his  body,  but  trusts  in 
society,  law,  and  order  to  render  him  security  in 
these  possessions.  The  clear-headed  man  of  to- 
day knows  that  when  government  can  no  longer 
protect  him  in  this  matter  of  money  possession 
and  money  circulation,  everything  else  he  has  in 
the  world,  for  the  protection  of  which  he  looks  to 
his  government,  is  surely  lost.  Therefore,  it  is 
the  government  to  which  we  must  look  to-day  for 
money,  and  through  the  ballot-box  demand  of  it 
the  best,  the  most  convenient,  and  least  expensive 
that  can  be  devised. 

In  this  age,  then,  of  the  scientific  and  the  prac- 
tical, the  modern,  driving-ahead  business  man  will 
not  allow  his  business  to  be  hampered  by  any 
sentiment  of  (jUI  usage,  or  of  any  class  interest. 


MONEY,   ITS   USE  AND   ABUSE.  6 1 

He  will  wish  that  these  considerations  should  not 
be  mixed  up  with  the  money  question  of  his 
nation.  The  new  man,  the  true  American,  wants 
a  dollar  for  service,  for  exchange,  and  not  to  bury 
in  the  ground,  or  with  which  merely  to  go  around 
the  world.  That  feeling  may  have  deep  root  in 
foreign  laborers,  coming  here  to  work  for  a  few 
years,  "to  get  ahead,"  and  then  return  to  their 
native  land ;  having  neither  love  for  our  country 
nor  respect  for  our  money.  The  money  which 
Americans  want  is  for  practical  use  in  effecting 
exchange  in  the  channels  of  trade  in  which  the 
great  bulk  of  the  people  engage. 

Considering  the  subject  of  money  from  the 
standpoint  of  service  to  the  American  people,  and 
not  to  foreigners,  the  least  expensive  material,  and 
that  which  is  always  obtainable  and  without  limit, 
is  the  most  desirable.  Up  to  the  year  1 862, 
money  in  this  country  had  been  designed  and 
used  for  money-lenders,  to  the  detriment  of  traders 
and  the  people.  But  in  18C1  a  party  of  laymen 
(so  far  as  the  politicians  were  concerned)  most 
unexpectedly  got  control  of  our  government. 
They  were  honest  men.  As  necessity  is  the 
mother  of  invention,  and  as  necessity,  bordering 
on  desperation,  called  for  larger  sums  of  money 
than  existed  in  the  land,  and  as  all  money  con- 
taining intrinsic  value  had  been  taken  to  I-'urope, 
the  government,  composed  of  these  laymen, 
invented  an  entirely  new  money  ;  a  money  which 


62  FALIJXG   PRICES. 

has  lasted  until  the  }M-e.sent  time,  and  is  the  best 
we  have  in  circulation  to-day. 

The  merits  of  this  money  are,  first,  it  is  in  its 
material  an  inexpensive  money ;  second,  the  Amer- 
ican people  have  the  use  of  it  without  charge  ; 
third,  it  is  not  only  endorsed  by  seventy  millions 
of  our  people,  but  the  holders  of  it  have  as  collat- 
eral security  seventy  billion  dollars  of  unmovable 
wealth ;  fourth,  being  unlike  gold,  it  is  a  non- 
exportable  money,  and  the  people  can  always 
know  the  amount  in  circulation ;  fifth,  it  is  an 
elastic  money  in  principle,  not  being  dependent  on 
a  substance  so  limited  in  quantity  that  it  can  be 
cornered  by  money-lenders,  and  thus  made  to  dis- 
tress those  having  obligations  coming  due  by 
extorting  from  them  usurious  rates  of  interest ; 
sixth,  it  will  be  under  the  control  of  the  American 
people,  who  can  regulate  the  volume,  and,  by  so 
doing,  regulate  the  value  of  property  and  fix  the 
price  of  commodities  and  labor  in  the  interests  of 
the  people. 

This  is  the  kind  of  money  which  was  designed 
for  the  American  people  by  that  "rail-splitter" 
President,  Abraham  Lincoln,  and  was  issued 
direct  to  the  American  people  in  payment  for  the 
material  and  service  rendered  the  government.  It 
passed  through  no  banker's  hands  to  have  six  per 
cent,  interest  charged  upon  it  before  it  could  reach 
the  people  and  facilitate  exchanges  in  property 
and  commodities. 


MONEY,    ITS    USE   AXD   ABUSE.  63 

This  ivas  the  first  "  honest  "  money  ever  issued 
by  our  nation.  It  robbed  no  one  ;  it  enriched  all. 
It  was  truly  an  American  money,  and  in  conso- 
nance with  the  spirit  of  our  free  institutions. 

This  kind  of  money  would  save  a  repetition  of 
the  humiliating  and  mortifying  transaction  which 
took  place  in  secret,  in  the  Executive  Mansion 
of  the  nation,  between  the  President  of  the 
United  States  and  some  foreign  Jews,  on  the 
eighth  day  of  February,  1895, — a  transaction 
which  enabled  the  American  people  to  procure  a 
little  gold  for  money,  and  the  nature  of  which  will 
be  understood  by  quoting  part  of  the  contract 
thereby  made,  which  is  as  follows  : 

This  agreement,  entered  into  this  eighth  day  of  Febru- 
ary, 1S95,  between  the  Secretary  of  the  Treasury  of  the 
United  States,  of  the  first  part,  and  Messrs.  August  Bel- 
mont &  Co.,  of  New  York,  on  behalf  of  Messrs.  N.  M, 
Rothschilds  &  Sons,  of  London,  Eng.,  and  themselves;  and 
Messrs.  J.  P.  Morgan  &  Co.,  of  New  York,  on  behalf  of 
Messrs.  J.  S.  Morgan  &  Co.,  of  London,  and  themselves, 
parties  of  the  second  part.  Witnesscth  :  Whereas.  .  .  . 
Now,  therefore,  do  the  said  parties  of  the  second  part  here- 
by agree  to  sell  and  deliver  to  the  United  States  3,500,000 
ounces  of  standard  gold  coin  of  tlie  United  .States,  at  the 
rate  of  ;?i 7.80441  per  ounce,  payable  in  United  States  four 
per  cent,  thirty-year  coupon  or  registered  bonds,  said  bonds 
to  be  dated  Feb.  i,  1895,  and  payable  at  the  pleasure  of  the 
United  .States  after  thirty  years  from  date.  .  .  .  .Second, 
should  the  Secretary  of  tlie  Treasury  desire  to  offer  or  .sell 
any  Ijonds  of  the  United  States  on  or  before  Oct.  i,  |8(>5, 
he  shall    fust  offer  tlie  same   to   the   parlies  of   the   .slcoiuI 


64  FALLING    PR  ICES. 

part;  hut  thereafter  he  shall  he  free  from  every  such 
ohligation  to  tlie  parties  of  the  second  part.  .  .  .  Third, 
the  Secretary  of  the  Treasury  herehy  reserves  the  ri^^ht, 
within  ten  days  from  the  date  hereof,  in  case  he  shall  i-eceive 
authority  from  Congress  therefor,  to  suhstitute  any  bonds  of 
the  United  States  bearing  three  per  cent,  interest,  of  which 
the  principal  and  interest  shall  be  specifically  payable  in 
United  States  gold  coin  of  the  present  weight  and  fineness, 
for  the  bonds  herein  alluded  to ;  such  three  per  cent,  bonds 
to  be  accepted  by  the  parties  of  the  second  part  at  par,  i.e., 
at  $18.60465  per  ounce  of  standard  gold.  .  .  .  Fifth,  in 
consideration  of  the  purchase  of  such  coin  the  parties  of 
the  second  part,  and  their  a.ssociates  hereunder,  assume 
and  will  bear  all  the  expenses  inevitable  to  loss  of  bringing 
gold  from  Europe  hereunder,  and,  as  far  as  lies  in  their 
power,  will  exert  all  financial  influence  and  will  make  all 
legitimate  efforts  to  protect  the  Treasury  of  the  United 
States  against  the  withdrawals  of  gold,  pending  the  com- 
plete performance  of  this  contract. 

In  witness  whereof,  the  parties  hereto  have  hereunto  set 
their  hands  in  five  parts,  this  eighth  day  of  February,  1895. 

J.  G.  Carlisle,  Secretary  of  the  Treasury. 

August  Belmont  &  Co.,  on  behalf  of  Messrs. 
N.  Rothschilds  &  Sons,  London,  and  them- 
selves. 

J.  P.  Morgan  &  Co.,  on  behalf  of  Messrs.  J, 
S.  Morgan  &  Co.,  London,  and  themselves. 
Attest:  W.  H.  Curtls. 

Francis  Lvnde  Stetson. 

Yes,  the  United  States  bought  ^50,000,000 
worth  of  cornered  material  on  which  to  stamp  her 
money.  This  fifty  millions  stayed  in  the  country 
about  three  months.  Thus,  this  country,  by  adopt- 
ing a  material  so  limited  in  supply  that  it  could 


MONEY,   ITS   USE   AiYD   ABUSE.  65 

easily  be  cornered,  and  by  putting  herself  at  the 
mercy  of  unscrupulous  money-changers,  was  made 
to  pay  thirty  years'  interest  on  money  of  which 
her  people  had  the  use  for  but  three  months'  time  ! 
By  this  one  transaction  it  can  be  seen  that  there 
will  be  no  limit  to  the  amount  of  debt  which  the 
holders  of  this  kind  of  money  material  can  force 
upon  this  nation. 

This  money  material  bargained  for  in  the  White 
House  was  intended  for  foreigners.  Probably  not 
one  American  farmer,  mechanic,  or  merchant  will 
ever  see  or  handle  a  dollar  of  it,  but  will  be  taxed 
for  the  fifty  millions  of  material  upon  which  the 
dollars  were  stamped,  for  the  next  thirty  years,  at 
the  rate  of  four  per  cent.  Thus  it  will  be  seen  by 
any  bright  business  man  that,  for  the  use  of 
$50,000,000  of  money  material,  for  three  months, 
the  people  of  this  nation  will  have  paid  $60,000,- 
000  ;  and  this  amount  will  be  paid  by  the  poor,  as 
the  bondholders  are  exempt  from  taxation.  This 
is  money  designed  by  the  rich,  and  is  for  the  rich, 
—  a  money  the  i^eople  never  handle.  Had  that 
material  been  the  same  which  Abraham  Lincoln 
used,  the  money  made  from  it,  instead  of  costing 
us  to  the  tune  of  sixty  millions  in  interest,  would 
not  have  cost  us  anything,  and  it  could  have 
been  used  without  interest  until  the  end  of  time. 
Moreover,  it  would  have  stayed  in  this  coun- 
try, and  kept  up  the  prices  of  labor,  property, 
and  pro(lucts,  and  kept    business   going,   instead 


66  FALLING   PRICES. 

of    breaking   down    prices    and    business    by    its 
withdrawal. 

Not  one  person  in  one  thousand  really  compre- 
hends the  office  of  money.  Most  people  think  it 
was  devised  to  lend,  while  the  opposite  is  the  truth. 
Instead  of  money  being  created  to  incur  debts,  its 
real  office  is  to  liquidate  them.  Any  nation  that 
increases  its  volume  of  currency,  thereby  dimin- 
ishes its  public  and  private  debts  ;  while  any  na- 
tion that  contracts  its  currency  thereby  increases 
the  same.  One  hundred  years  ago  it  was  cj[uite  a 
common  belief  that  "  A  national  debt  is  a  national 
blessing."  Such  control  did  the  money-lenders 
have  of  the  public  mind,  that  a  man  was  looked 
upon  as  a  little  queer  who  would  not  accept  it. 

To  show  that  the  money-lenders  have  the  same 
shaping  of  the  public  mind  to-day,  in  spite  of  our 
commoji  school  system,  and  in  spite  of  an  issue  of 
papers,  magazines,  and  periodicals  sufficient  to  re- 
paper  the  walls  of  every  house  daily,  — ^all  which 
educational  facilities  ought  to  make  the  people  too 
intelligent  to  be  so  subservient  to  the  money- 
power,  —  I  will  assume  that  this  nation  will  have 
not  less  than  two  billions  of  circulating  medium 
for  the  next  twenty-five  years. 

Mr.  Gage,  who  claims  to  be  a  banker  by  occu- 
pation, but  is  now  Secretary  of  the  United  States 
Treasury,  has  placed  a  bill  before  the  committee 
on  currency  to  issue  $930,000,000  to  the  banks. 
In  order  to  get  this  sum   of   money,   the   banks 


MONEY,   ITS    USE   AND   ABUSE.  6/ 

must  collect  from  the  people's  pockets  the 
money  now  outstanding  and  in  circulation,  as  a 
currency  free  of  interest,  take  it  to  the  Treasury, 
and  with  it  purchase  $930,000,000  bonds,  —  say,  at 
about  three  per  cent,  interest.  Upon  these  bonds 
the  government  will  then  issue  to  the  bankers 
$930,000,000,  which  the  banks  will  own.  These 
dollars  the  banks  now  lend  to  the  people  as  a  cir- 
culating medium,  at  six  per  cent.  ;  this  would  make 
nine  per  cent.  Thus  we  should  have  paper  money 
and  paper  bonds  for  which  we  should  pay  nine  per 
cent,  interest.  Suppose  the  balance  of  the  52,000,- 
000,000,  which  I  am  assuming  to  be  in  existence, 
should  be  gold,  or  gold  and  silver ;  this  the  gov- 
ernment cannot  get  sulftcient  to  use  as  material 
upon  which  to  stamp  the  dollar,  without  paying  a 
dollar  for  it.  Thus  the  material  used  for  the  bal- 
ance of  the  currency  ($1,070,000,000)  will  require 
an  investment  equal  to  the  amoimt  of  dollars  of 
the  currcnc}'.  The  interest  upon  this  at  five  per 
cent,  will  be  $53,500,000  per  annum.  The  total 
interest  on  the  $930,000,000  of  bonds  and  cur- 
rency, averaging  nine  per  cent.,  would  amount  to 
$83,700,000,  as  will  be  seen  by  the  following 
table  : 

3  per  cent,  on  $930,000,000  Bonds       .         .  ,$27,900,000 

6  per  cent,  on  $930,000,000  Currency  .         .  55,^00,000 

5  per  cent,  on  $1,070,000,000  Material  •         .  53,500,000 

Interest  per  annum      .  .....       Ji 37,200,000 

25  years  at  ^137,200,000  per  annum  .    $3,430,000,000 


68  FALLING   PRICES. 

l^y  the  above,  any  business  man  can  see  at  a 
glance  what  it  will  cost  the  American  people  to 
use  the  money  of  monarchies,  and  a  money-lend- 
ing class,  instead  of  using  the  money  originated  by 
Abraham  Lincoln  and  the  early  fathers  of  the  Re- 
publican party.  They  were  bitterly  opposed  by  the 
money-lenders  ;  but  they  were  honest,  and  stood  by 
the  people's  interests.  There  is  only  a  remnant 
of  this  money  left  ;  but  it  is  this  money,  however, 
which  has  served  the  American  people  for  thirty- 
six  years  without  a  cent  of  cost  for  interest  or 
material,  which  has  aroused  the  bankers  and  Mr. 
Gage  to  use  all  the  powers  at  their  command  to 
annihilate  it.  l^ut  Abraham  Lincoln's  name  and 
his  life's  blood  have  not  only  made  that  money 
honest  money,  but  have  made  it  sacred  to  every 
lover  of  the  old  fathers  of  the  Republican  party, 
who  had  to  fight  the  money-lenders  on  both  sides 
of  the  Atlantic  in  order  to  get  it  issued.  It  is 
American  money.  It  has  been  assailed  by  every 
opprobrious  epithet  which  the  banking  fraternity 
could  hurl  against  it,  and,  next  to  the  Stars  and 
Stripes,  it  has  the  admiration  and  love  of  all  the 
truly  loyal  Americans  in  the  land.  And,  right 
here,  I  wish  to  observe  that  to-day  no  better 
test  of  loyalty  can  be  had  than  that  which 
gives  endorsement  to  the  money  issues  by  the 
fathers  of  the  Republican  party  ;  and  any  man's 
loyalty  to  free  institutions  and  the  people's  in- 
terests  should    be    carefully    looked    after     who 


MONEY,    ITS    USE   AND   ABUSE.  69 

would  assail  the  work  that  came  from  their 
hands. 

This  Abraham  Lincoln  money  to  which  I  liave 
referred  was  not  a  visionary  money,  —  a  so- 
called  "theoretical,"  "mythological,"  "soap-bub- 
ble" money.  It  was  money  which  stood  the  heat 
of  battle,  suspension  of  banks,  shaking  of  confi- 
dence, and  the  most  treacherous  and  fiercest 
attacks  from  the  money  power ;  and  yet,  all 
through  this  crucial  test,  it  stood  one-half  per 
cent,  higher  than  that  most  boasted-of  gold  money, 
—  a  pirate's  money,  a  slave-trader's  money,  an 
outlaw's  money,  every  dollar  of  which  in  existence 
has  the  mark  of  Cain  upon  it.  It  has  sold  out 
the  widow ;  it  has  robbed  the  orphan  ;  it  has 
taken  bread  from  the  hungry,  and  clothes  from 
the  shivering.  It  lusteth  for  the  sensual.  It 
steals  home  and  farm  alike.  While  it  denounces 
the  use  of  law  in  money,  it  uses  law  to  effect  its 
own  insatiate  greed.  It  imparts  its  own  nature  to 
the  man  who  clutches  it  ;  and  his  soul,  like  his 
hands,  contracts  at  its  touch. 

It  was  not  so  with  Lincoln's  money.  ihat  was 
hailed  with  delight  by  the  sun-browned  face  of  the 
honest  farmer,  as  he  took  it  loyally,  patriotically, 
and  gladly,  in  payment  for  forage  sold  to  the 
government.  The  patriots  in  the  ai  my  received 
it  with  round  upon  round  of  cheers,  as  the  crisp 
bills  were  counted  out  to  them.  l-'or  the  first 
time  in  their  lives  they  had  been   paid  in  actual 


70  FALL/XG   PRICES. 

paper  money.  I'his  was  their  own  money,  just  as 
much  as  the  postage  stamps  or  the  war-ships  or 
the  capitol  at  Washington  was  theirs.  They  sent 
it  to  their  homes,  where  it  was  eagerly  sought  by 
the  storekeepers,  who,  too,  expressed  joy  as  they 
put  it  away  in  their  money-drawers.  The  store- 
keepers took  it  to  the  bank ;  but  here  the  scene 
changes.  Scowls  and  black  looks  only  greeted  it 
by  the  mone3''-changers.  But  the  law  said,  "Take 
it,  and  surrender  your  mortgage  on  this  man's 
property  ;  "  and  the  banker  was  compelled  to  obey. 
It  lighted  the  fire  in  the  furnaces,  and  the  idle  men 
went  to  work ;  the  factory  gates  were  swung  wide 
open,  and  the  thin  faces  of  the  hungry  operatives 
brightened  up.  No  more  hard  times ;  no  more 
low  and  constantly  falling  prices.  The  food  from 
the  field  of  the  farmer  soon  reached  the  hungry 
workers  of  the  mills  ;  and,  in  return,  the  fabric  of 
the  mill  soon  found  a  market  on  the  farm.  It 
turned  gloom  and  despondency  into  cheer  and 
hope.  Young  men  and  maidens,  adorned  in  their 
new  bright  clothes,  earned  through  the  life-giving 
influence  to  trade  by  this  new  money,  mated  and 
made  happy  homes,  which  in  turn  called  upon  the 
woodman  for  lumber  for  buildings  and  furniture  ; 
and  thus  its  power  spread  until  the  whole  nation 
became  a  busy  hive.  Advertisements  for  workmen 
appeared  everywhere,  and  wages  were  advanced 
all  along  the  line.  Mills  had  orders  for  a  year 
ahead.     Shipyards    were  pushed  night  and    day. 


MONEY,   ITS   USE   AND  ABUSE.  /I 

Market-houses  and  stores  alike  were  constantly 
clamoring  for  stock,  and  the  old  familiar  complaint 
of  "overproduction"  was  silenced  by  a  complaint 
of  under-supply  ;  the  "  want  of  confidence  "  cry 
by  the  bankers,  to  start  trade,  was  drowned  out  by 
the  cry  for  goods  coming  from  the  people  with 
pockets  full  of  Uncle  Abraham's  money. 

A  great  change  had  now  come  over  the  nation. 
The  workers  in  field  and  factory,  by  Uncle  Abra- 
ham's money,  had  had  purchasing  power  imparted 
to  their  labor,  the  farmer  to  his  products,  and  the 
manufacturer  to  his  goods.  The  people  were  on 
top  in  legislation,  and  the  cry  went  out  at  the 
polls,  from  the  masses,  for  the  dearest  labor,  the 
best  wheat,  and  the  finest  beef ;  and  the  only 
complaint  came  from  those  who  would  not  work, 
and  whose  occupation  of  issuing  money  had  been 
taken  away  by  Uncle  Abe.  From  these  came  the 
wail  of  distress,  and  the  cry  for  the  old  money,  — 
gold  money,  dear  money  ;  and  for  its  concomitant, 
cheap  labor  and  cheap  wheat,  low-priced  beef  and 
cheap  goods.  As  long  as  Uncle  Abe  lived,  the 
prices  of  everything  the  common  people  owned 
went  up  on  their  hands.  They  grew  richer  and 
richer  ;  merchants  and  business  men  could  retire 
in  early  life,  and  hand  their  business  over  to  their 
children.  The  workin,:^  pcMpIc  l)tiilt  themselves 
new  and  elegant  houses,  filled  tiiem  with  comfort- 
able anfl  luxurious  furniture  ;  they  bought  stock 
in    the   mills  in   whii  h   they   worked,  and   Ix^'i^an   to 


72 


FALLING   PRICES. 


have  a  voice  in  their  management.  Longer  sum- 
mer vacations  and  shorter  work-hours  became  the 
order  of  the  day,  and  from  one  end  of  the  land  to 
the  other  there  was  joy  and  hai)piness ;  and, 
although  there  was  war  in  the  South,  there  was 
peace  and  plenty  everywhere  else  where  Uncle 
Abe's  money  went. 

In  this  heyday  of  universal  prosperity  an  unex- 
pected blow  fell  on  the  common  people.  The 
whole  land  was  draped  in  mourning ;  but  while 
the  people  felt  the  terrible  blow  in  the  loss  of 
their  great  benefactor,  who  had  given  them  their 
own  money,  and  restored  the  Union,  and  freed 
four  millions  of  slaves,  they  did  not  know  of  the 
terrible  future  which  awaited  them. 

Little  did  they  dream  that  in  less  than  thirty 
years  those  who  would  not  work,  —  those  who  were 
complaining  of  hard  times  in  good  times;  those  who 
wanted  the  old  money,  gold  money,  dear  money ; 
who  wanted  cheap  labor  and  cheap  wheat,  low- 
priced  beef  and  cheap  goods, — that  the  non-pro- 
ducing money-lenders  would  get  into  power,  destroy 
Uncle  Abe's  money,  demand  gold  money,  dear 
money,  cheap  labor  and  cheap  cotton  and  cheap 
wheat,  and  that  the  happy  and  unsuspicious  work- 
ing people  of  that  day  would  be  reduced  to  the 
verge  of  starvation,  thrown  out  of  employment, 
and  the  land  filled  with  marching  armies  of  hungry 
men  unemployed.  All  this  has  come  to  pass,  and 
in  the  face  of  all  this  suffering,  at  every  election, 


MONEY,   ITS    USE   AND  ABUSE.  J I 

the  old  cry  goes  up  for  gold,  for  banks,  for  bonds ; 
and  those  men  who  do  not  work,  and  never  have 
labored,  have,  under  the  reign  of  gold  money, 
become  worth  hundreds  upon  hundreds  of  millions 
of  dollars,  and  have  accumulated  this  during  the 
same  years  in  which  the  working  people  have  lost 
their  homes,  their  farms,  and  their  opportunity  to 
labor. 

This  is  the  lesson  and  the  experience  which  the 
American  people  have  had  to  pass  through  before 
they  could  be  made  to  understand  the  importance 
of  becoming  informed  upon  the  subject  of  finance 
and  banking,  and  of  learning  the  secret  which  the 
money  power  uses  to  get  possession  of  the  labor 
and  products  of  the  masses.  It  is  done  by  con- 
trolling the  material  on  which  the  money  is  stamped. 
When  the  money  power  of  a  nation  gets  control  of 
the  government,  they  can,  by  dictating  the  material 
on  which  the  dollar  is  stamped,  control  the  volume 
of  dollars  by  selecting  that  material  which,  because 
of  its  scarcity,  is  impossible  to  be  obtained  in  suffi- 
cient volume  to  make  the  necessary  exchanges,  — 
thus  forcing  the  people  to  use  credit  money,  fur- 
nished by  the  banker,  and  upon  which  they  must 
pay  interest. 

It  may  be  well  right  here  to  show  what  this 
money  is  to  which  1  have  referred. 

I'njbably  there  is  not  a  l)usiness  man  living,  who 
did  business  in  icS62,  who  does  not  remember  the 
great  change  which  then  came  over  the  country, 


74  FALLING  I'RICKS. 

in  business  activity,  in  rise  in  values,  and  in  the 
great  demand  for  labor ;  but  probably  not  one  in  a 
thousand,  who  has  not  made  finance  a  study,  even 
mistrusted  that  this  change  was  brought  about  by 
financial  legislation  and  not  by  war.  Even  many 
of  those  who  do  now  know  that  financial  legislation 
was  the  agency  which  brought  about  this  great 
change  in  1862,  would  jeopardize  their  popularity 
with  the  rich  by  trying  to  show  the  benefits  that 
would  come  to  the  producing  class  should  they  use 
the  power  they  have  at  the  ballot-box  once  again 
to  devise  a  dollar  and  to  secure  financial  legisla- 
tion which  would  promote  the  real  interests  of  the 
people, — just  as  the  bankers  have  always  done  in 
behalf  of  their  own  interests,  since  banking  and 
money  came  into  existence. 

This  movement  throughout  the  country  to-day, 
having  for  its  purpose  to  take  the  legislation  con- 
cerning the  dollar  of  the  United  States  out  of  the 
hands  of  the  bankers  and  restore  it  to  the  people, 
instead  of  allowing  irresponsible  Conventions  and 
Bank  Associations  to  meet  and  get  the  President 
to  mention  their  plans  in  his  messages,  is  as  im- 
portant a  movement  as  the  Abolition  movement 
was,  and  a  thousand  times  farther  reaching,  because 
it  is  something  which  concerns  the  whole  people 
alike.  North,  South,  East,  and  West,  It  is  no 
more  the  banker's  business,  as  a  banker,  to  decide 
what  kind  of  a  dollar  the  American  people  shall 
adopt  than  it  is  the  business  of  the  painters  of  the 


MONEY,   ITS    USE   AiVD   ABUSE.  75 

United  States  to  regulate  the  color  to  be  used  in 
painting  our  houses.  After  the  American  people 
have  decided  at  the  ballot-box  what  kind  of  a  dol- 
lar they  will  have,  and  the  number  of  such  dollars 
they  will  have  issued  per  capita,  it  is  then  the 
banker's  privilege  to  do  a  banking  business  with 
these  dollars.  If  he  objects  to  the  kind  of  dollar 
the  people  have  fixed  upon,  it  is  his  privilege  to  go 
out  of  the  banking  business.  So  far  as  brazen- 
faced assumption  has  been  exhibited  by  any  class 
of  trade  or  business,  the  bankers  have  exceeded 
them  all  in  their  attempt  to  dictate  the  kind  of  a 
dollar  which  the  American  people  shall  use.  In 
England,  and  in  monarchical  countries  generally, 
the  bankers  have  been  indulged  in  such  privilege ; 
but  they  make  the  mistake  of  their  lives  in  demand- 
ing that  privilege  from  this  republic.  It  must  be 
acknowledged  that  even  in  this  country,  in  a  more 
or  less  covert  way,  they  have  always  interfered  in 
the  matter  of  the  people's  monc)',  but  never  before 
have  they  been  so  emboldened  as  to  dictate  the 
kind  of  a  dollar  which  the  American  ]ocople  shall 
use. 

It  is  to  oppose  this  last  attempt  at  dictating  the 
banker's  dollar,  that  this  present  uprising  of  the 
people  has  taken  place,  —  a  movement  which  is  as 
sure  to  end  in  the  |)eoiile's  favor  as  did  llu-  revolu- 
tion of  seventeen  hundred  and  seventy-six. 


CHAPTER  V. 

OUR  MONEY  A  BANKEr's  MONEY. 

It  may  be  well  here  to  show  how  the  moneyed 
aristocracy  confiscate  the  labor  and  commodities 
of  the  producing  classes  without  returning  any 
equivalent. 

It  is  done  through  the  dollar,  and  in  four 
different  ways  : 

First,  by  inducing  the  people  to  purchase  a 
commodity  which  costs  a  thousand  times  more 
than  is  necessary  for  the  material  out  of  which 
the  dollar  is  made.  Second,  by  selecting  that 
kind  of  material  which,  because  of  its  scarcity, 
makes  it  impossible  to  furnish  sufficient  currency 
for  the  needs  of  trade.  Third,  by  creating  private 
institutions  to  furnish  the  amount  needed  to  do 
the  business,  and  charging  the  people  six  or  ten 
per  cent,  for  its  use.  Fourth,  by  limiting  all  cash 
transactions  to  about  three  per  cent.,  by  limiting 
the  volume  of  money, — leaving  about  ninety- 
seven  per  cent,  to  be  done  on  some  substitute  for 
money,  but  upon  which  interest  is  paid. 

As  to  the  first  of  these  methods, — that  con- 
cerning the  material  used  in  the  dollar, — it  is 
very  j^lain    that    the   gold  in  a  dollar  costs  thou- 

76 


OUR   MONEY  A    BANKER'S  MONEY.  7/ 

sands  of  times  more  than  paper  would  cost.  No 
one  can  dispute  this  fact.  The  people  have  been 
forced  under  circumstances  over  which  they  have 
no  control  to  use  paper  dollars  most  of  their 
life,  and  to-day  Secretary  Gage  is  recommending 
the  issue  of  $930,000,000  of  paper  dollars  for 
the  bankers.  Now,  this  money  is  intended  for  the 
people's  use ;  that  is,  by  their  paying  for  it.  But 
if  Mr.  Gage  can  make  money  out  of  paper  for  the 
banks  which  is  good  enough  for  the  people's  use, 
it  goes  without  saying  that  paper  will  make  good 
money  for  the  people  without  the  banks.  There- 
fore, all  the  money  taxed  out  of  the  people's 
pockets  for  the  purpose  of  buying  gold,  to  coin 
into  dollars  for  our  currency,  is  an  unnecessary 
ta.x,  and  hence  a  robbery. 

The  second  and  third  of  these  methods  T  will 
treat  under  one  head. 

In  having  our  money  made  from  a  material  the 
insufficiency  of  which  causes  the  use  of  credit- 
money,  and  for  which  the  people  pay  interest,  is  a 
cleverly  devised  trick  by  which  labor  and  products 
are  taken  from  the  people  and  for  which  they 
receive  no  equivalent.  The  reason  the  govern- 
ment coins  so  little  gold  is  that  it  cannot  get 
more  to  coin.  Now,  had  the  government  stamped 
jjaper  instead  of  gold,  it  could  have  had  sufficient 
for  its  entire  currency  without  providing  private 
money  stamped  on  paper,  thus  forcing  the  people 
to  pay  for  the  use  of  it ;  and  instead  of  taking  the 


78  FALLING   r KICKS. 

profit  derived  from  it  and  using  it  for  government 
expenses,  the  government  allows  the  banker  to 
put  it  in  his  pocket.  If  the  clerks  in  the  postal 
money-order  department  did  the  same  thing,  — 
that  is,  put  the  percentage  paid  for  the  use  of 
government  money  in  their  pockets,  they  would 
be  sent  to  State's  Prison. 

In  exposing  the  outrage  involved  in  the  fourth 
method,  by  which  currency  has  been  kept  so 
limited  in  the  interest  of  the  money-lending 
classes  that  only  three  per  cent,  of  all  our  busi- 
ness is  done  on  a  cash  basis,  I  have  already  shown 
how  we  could  have  all  the  currency  the  people 
saw  fit  to  fix  upon  for  our  business  needs,  and  will 
only  here  say  that  if  the  same  material  were  used 
which  the  government  uses  for  the  banks,  the 
currency  could  gradually  be  increased  until  ninety- 
seven  per  cent,  of  the  business  should  be  done  for 
cash,  and  only  three  per  cent,  done  on  credit.  As 
to  the  effects  of  this  change  upon  the  people,  — 
upon  the  great  producing  and  distributing  classes, 
—  I  will  say  that  they  would  be  able  to  keep  all 
they  produced,  and  enjoy  the  full  fruits  of  their 
own  labor. 

In  order  to  show  clearly  how  the  people  get 
nothing  back  for  interest  money  paid  to  the 
money-lenders,  I  will  prove  that  all  interest  is 
paid  upon  that  which  it  would  cost  the  people 
barely  nothing  to  supply. 

We  use  millions  upon  millions  of  dollars'  worth 


OUR   MONEY  A    BANKER'S  MONEY.  79 

of  postage  stamps.  Suppose  the  government 
should  Hmit  the  issue  of  these  to  only  one-tenth 
the  volume  needed,  and  then  charter  a  company 
for  the  purpose  of  supplying  a  substitute  stamp, 
"receivable  by  the  government,"  requiring  that 
this  substitute  stamp  should  be  procurable  by  the 
people  by  paying  six  per  cent,  commission  to  this 
company  for  it.  If  this  seems  to  my  reader  a 
queer  supposition,  let  me  whisper  in  his  ear  the 
additional  suggestion  that  a  majority  of  the  mem- 
bers in  Congress  might  be  stockholders  in  the 
company  to  which  these  six  per  cent,  commission 
substitute  stamps  were  sold,  and  then  he  may  be 
assisted  in  accounting  for  the  quceiiicss  of  the  sup- 
position !  For  there  is  no  more  excuse  for  issuing 
a  certain  part  of  our  nation's  currency  in  six  per 
cent,  substitute  corporation  money  than  there 
would  be  in  the  stamp  scheme  which  I  have  sup- 
posed ;  and  all  the  money  issued  in  this  manner  is 
only  a  trick  whereby  to  confiscate  the  earnings  of 
the  masses.  It  is  estimated  by  different  authori- 
ties that  the  annual  sum  taken  from  the  producing 
classes  through  our  present  financial  system,  with 
its  limited  supply  of  currency,  amounts  to  the 
enormous  total  of  $2,000,000,000. 

I  have  shown  how  the  people  could  be  robbed 
by  a  postage-stamp  scheme  ;  let  me  now  show 
how  it  could  be  done  with  the  water  we  drink. 

It  is  a  fact  that  there  is  water  enough  for  all 
in  the  land.     Now,  suppo.se  that  Congress  siiould 


8o  FALLING   PRICES. 

lease  this  water  of  the  nation  to  a  National  Water 
Company  at  a  nominal  sum,  say  enough  to  pay 
for  the  lease  and  for  drawing  it  up.  Suppose, 
also,  that  in  order  to  protect  this  company  the 
government  should  levy  an  internal  revenue  tax  of 
ten  cents  per  quart  upon  any  water  not  bought 
of  this  National  Water  Company.  Would  not  the 
people  be  out  of  pocket  by  every  dollar  they  paid 
for  water,  —  the  water  which  already  belonged 
to  them,  but  which,  for  some  reason  unknown  to 
them,  had  by  the  government  been  leased  to  a 
private  company  }  Yet  this  is  precisely  what  the 
legislators  in  Congress  have  done  with  our  money. 
It  was  once  the  people's  ;  issued  direct  to  the 
people.  It  was  paper  money.  It  was  in  common 
use  by,  and  free  of  cost  to,  the  people.  Congress 
took  this  money  from  the  people,  and  farmed  it 
out  to  a  private  national  bank  company,  charging 
the  company  nothing  for  the  use  of  it,  but  taxing 
all  other  companies  ten  per  cent,  upon  their  issues 
in  order  to  suppress  all  competition.  It  is  very 
clear,  then,  that  if  the  people  once  had  this  amount 
of  money  in  use  without  charge,  and  it  was  after- 
wards farmed  out,  and  the  people  charged  for  its 
use,  such  a  transaction  was  equivalent  to  just  so 
much  transfer  of  products  to  the  rich  without 
giving  to  the  people  any  equivalent  whatever  in 
return. 

But    capturing  Congress  and  getting   the  peo- 
ple's money  away  from  them  was  not  the  worst  of 


OCR   MOXEV  A    J^AiVA'ER'S  MONEY.  8 1 

the  crime  committed  by  the  money-lenders.  After 
once  acquiring  in  this  way  the  control  of  the 
people,  they  began  to  conspire  to  squeeze  them 
in  every  way  for  a  profit.  I  will  not  stop  to  go 
into  a  detailed  account  of  the  different  schemes 
employed  by  the  money-lenders  since  the  govern- 
ment turned  the  people's  money  over  to  them, 
but  will  be  content  to  give  only  one  instance,  in 
order  to  illustrate  the  matter. 

On  Feb.  21,  1893,  twelve  of  the  largest  National 
Banks  in  New  York  City  conspired  to  spring  a 
panic  on  the  country.  They  invited  all  the  finan- 
cial institutions  of  the  city  to  join  them  ;  and  on 
May  ist  the  panic  came.  It  was  brought  about 
by  these  l^anks  refusing  any  discounts  for  the 
month  of  I\Iay,  and,  furthermore,  by  calling  in  all 
outstanding  call  loans.  It  is  needless  to  describe 
at  length  the  widespread  disaster  following  this 
panic  caused  by  the  conspiracy  of  these  Banks." 
Suffice  it  to  say  that  not  only  were  si.x  hundred 
financial  institutions  wrecked  in  four  months'  time, 
but  that  nearly  all  the  industrial  institutions  in 
the  country  closed,  while  the  leading  staples  of  the 
country, — cotton,  wheat,  corn,  beef,  etc.,  —  fell 
fifty  per  cent,  during  the  year,  carrying  ruin  and 
disaster  into  thou.sands  of  families  throughout  the 

'  The  hi.story  of  tlie  conspiracy  eiilciod  into  Ijy  tlicsc  I'.anlis, 
for  the  purpose  of  springing  the  panic  of  1893  upon  the  country, 
was  written  by  J.  W.  Shuckers,  private  secretary  to  .Salmon  P. 
Chase  during  tlie  late  war. 


82  FALLING   PRICES. 

land.'  Moreover,  by  means  of  this  panic  brought 
on  the  country  in  1893,  the  money-lenders  were 
able  to  extort  usurious  rates  of  interest,  and  to 
force  sales  of  all  property  which  they  had  in  their 
power.  This  break-down  in  the  prices  of  fifty 
per  cent,  on  products,  in  four  months'  time,  was  a 
transference  of  property  from  the  hands  of  the 
poor  to  the  hands  of  the  rich,  "  through  the  dol- 
lar." Had  the  people  been  permitted  to  retain 
the  national  money  in  circulation,  which  would 
have  prevented  the  banks  from  controlling  it,  that 
loss  to  the  producers  of  the  land  of  a  fifty  per 
cent,  fall  in  their  products  could  not  have  taken 
place.  With  a  few  exceptions,  —  such  as  wheat, 
which  on  a  short  world's  crop  advanced,  —  this 
fall  of  prices  has  become  permanent. 

This  great  loss  to  the  producers  of  the  country, 
resulting  from  the  contraction  both  of  the  currency 
and  credits  of  the  nation,  should  be  charged  home 
to  the  Old  World's  inicjuitous  bank  system,  —  a 
system  which  was  imported  during  our  early  colo- 
nial days,  and  which,  like  all  other  British  sys- 
tems, was  designed  for  the  purpose  of  confiscating 
the  products  and  labor  of  the  toilers.  Could  the 
fathers  of  the  Republic  have  overthrown  the  slave 
system  and  the  financial  system  at  the  same  time 
they  overthrew  the  governmental  system  of  Eng- 
land in  our  land,  there  would  be  no  estimating  the 

'  The  object  these  Banks  had  was  to  force  a  "  slow"  Senate 
to  act,  as  I  will  show  further  on  by  quoting  Bank  papers. 


OUR   MONEY  A    BANKER'S  MONEY.  83 

blood  and  treasure  and  human  suffering  from  which 
the  American  people  would  have  been  saved. 

Having  shown  the  four  methods  by  which  the 
present  monetary  system  of  our  country,  unwisely 
borrowed  from  the  Old  World,  has  oppressed  and 
despoiled  the  people,  I  will  further  on  produce 
some  of  the  acts  creating  money,  as  well  as  some 
of  the  speeches  of  loyal  men  who  sustained  the 
money  of  Lincoln,  —  a  money  independent  of  the 
redemption  principle,  which  was  designed  to  rob 
producers  and  toilers  of  the  fruits  of  their  labor. 

In  treating  of  the  nature  of  that  money  which 
was  first  issued  by  Lincoln  and  his  party,  I  will 
quote  from  the  opening  paragraph  of  "  Spaulding's 
Financial  History  of  the  War,"  in  order  to  show 
that  some  kind  of  money  had  at  that  time  to  be 
devised,  or  the  cause  of  the  Union  would  have  been 
lost.      It  says  : 

The  United  States,  at  the  breaking  out  of  the  rebellion, 
had  no  national  bank  currency,  and  no  gold  or  available 
means  in  the  Treasury  or  Sub-Treasury,  to  carry  on  the  war 
for  the  Union  ;  and  consequently  the  means  to  prosecute  tlie 
war  had  to  be  obtained  upon  the  credit  of  the  government 
and  by  taxation.  The  fundable  legal  tender  was  the  most 
available  form  of  credit  which  the  government  could  use  in 
crushing  the  rebellion.  It  was  at  once  a  loan  to  the  govern- 
ment without  interest,  and  a  national  currency,  which  was 
so  much  needed  for  disbyrsement  in  small  sums  during  the 
pressing  exigencies  of  war.  It  was  indispensably  necessary, 
anfl  a  most  powerful  instrumentality  in  saving  the  govern- 
ment and  maintaining  the  national  unity. 


84  FALLING   rKICES. 

All  the  gold  and  silver  had  fled  the  country. 
This  being  the  basis  upon  which  the  State-bank 
issues  rested,  the  country  was  also  deprived  of  the 
State-bank  bills,  which  were  shaky,  even  in  the 
best  of  times.      Iwery  one  was  waiting  for  money, 

—  money  with  which  goods  could  be  bought  and 
debts  could  be  paid, — and  all  eyes  were  patiently 
fixed  upon  Congress  for  help.  There  were  a  few 
wise  and  patriotic  men  who  were  doing  the  best 
they  knew  in  getting  a  money  as  a  substitute  for 
gold  and  silver.  This  they  had  to  do,  for  gold  and 
silver  had  deserted  the  cause  of  freedom  at  the 
first  gun  fired  at  Sumter.  Hon.  E.  G.  Spaulding, 
chairman  of  the  Committee  of  Ways  and  Means, 
was  a  loyal  man.  He  was  a  banker,  and  could  see 
money  and  its  use  only  as  a  banker  sees  it,  hence  in 
his  history,  from  which  we  have  quoted,  he  e;<presses 
his  ideas  regarding  government  money  "as  a  loan 
to  the  government  without  interest,  and  a  national 
currency."  How  a  dollar  issued  to  a  citizen  and 
made  a  legal  tender  in  payment  for  service  or 
material,  —  the  citizen,  in  turn,  buying  stamps 
with  the  same  dollar,  or  paying  his  government 
taxes  with  it, — could  be  called  "a  loan-money" 
is  only  clear  to  bankers  ;  but  it  shows  how  hard  it 
is  for  men  educated  in  old  schools  of  thought  to 
see  new  ideas. 

Ericsson  was  turned  down  with  his  monitor 
model  until   he  got  his  idea  before  a  "  hayseed," 

—  that  man  whom  the   people   affectionately  call 


OUR   MONEY  A   BANKER'S  MONEY.  85 

"honest  Old  Abe,"  —  who,  when  he  saw  it,  said  it 
was  a  good  idea ;  then  naval  authorities  took  it  up, 
since  which  time  it  has  revolutionized  the  architec- 
ture of  the  navies  of  the  world.  So  with  money. 
Those  who  look  upon  it  as  something  to  hoard,  to 
store  away  as  wealth,  to  receive  as  interest  on  dol- 
lars loaned,  who  have  nothing  to  sell  except  money, 
and  who,  of  course,  wish  to  buy  cheap  everything 
they  need,  —  such  men  want  a  dear  dollar,  a  dollar 
which  shall  compel  men  not  dealing  in  money  to 
sell  everything  cheap  and  buy  everything  dear. 
Such  men  did  not  favor  the  creation  by  the 
government  of  a  people's  money,  a  money  which 
should  circulate  freely  among  the  people,  as  cur- 
rency. They  wanted  a  hard  dollar,  as  hard  as 
their  own  selfish  hearts  ;  and  they  therefore  looked 
coldly  upon  the  proposed  legal-tender  "greenback." 
But  "  honest  Old  Abe "  saw  that  it  was  a  good 
thing,  —  that  it  would  save  the  country  from  de- 
struction and  the  peo]:)le  from  financial  distress; 
and  the  result  comj^lctcly  vindicated  his  judgment. 
rVom  this  it  may  be  seen  that  there  are  two 
sides  to  look  at  in  making  a  government  dollar. 
There  is  something  superior  to  scholastic  finance ; 
and  this  is  equity  in  the  dollar.  A  dollar  created 
in  such  a  manner  or  under  such  a  law  as  to  force 
interest  to  be  paid  b)-  one  class  to  another  unneces- 
sarily is  rol)bery.  Now  there  aie  two  ways  to 
effect  this  robbery.  One  is  first  to  pass  a  law 
that  all  debts  must  be  paid  in  money,  then  to  find 


S6  FALLING   PRICES. 

the  scarcest  thing  on  earth  of  which  to  make  that 
money,  so  that  only  one-tenth  of  what  is  required 
can  be  supplied  :  thus  the  man  buying  on  credit 
will  be  forced  to  sell  an  unjust  proportion  of  what 
he  has  produced,  to  get  this  scarce  dollar,  or  will 
be  compelled  to  hire  it  at  an  unjust  rate  of  inter- 
est. The  other  way  is  to  issue  a  certain  volume 
of  dollars,  measuring  the  values  of  things  outside 
the  dollar ;  then  to  put  out  loans,  and  afterward 
make  these  dollars  scarce  by  either  demonetizing 
part  of  them  or  refunding  ("converting")  them 
into  bonds.  This  process  will  cause  the  price  of 
everything  else  that  is  in  the  people's  hands  to 
fall,  so  that  the  banker,  or  credit  class,  will  get  an 
overamount  from  the  people  when  paying  their 
debts. 

If  ever  a  golden  opportunity  was  offered  this 
nation  to  make  itself  great,  it  was  in  1861,  at  the 
beginning  of  the  Civil  War,  —  to  emancipate  chat- 
tel slavery,  and  by  a  new  financial  system  to  eman- 
cipate the  masses  from  a  Bank-dollar  slavery.  At 
that  time,  however,  but  little  was  known  about 
money  and  its  effect  upon  labor,  products,  and 
property.  The  most  known  was  from  a  few  well- 
posted  bankers,  and  a  few  books  by  foreign  writers 
upon  the  subject ;  therefore,  it  would  not  now  be 
just  to  judge  harshly  the  men  that  devised  the 
dollar  of  that  time  in  the  interest  of  the  rich  peo- 
ple instead  of  the  whole  people.  The  first  issues 
of  paper  money  made  in  our  country,  and  known 


OUR   MONEY  A    BANKER'S  MONEY.  87 

as  "  Demand  Notes,"  were  issued  in  the  interest 
of  the  whole  people,  and  were  made  legal  tender 
for  paying  all  debts  alike,  whether  to  the  rich  man 
or  the  poor  man  ;  but  soon  the  bankers  were  sum- 
moned in  counsel,  and  the  first  thing  recommended 
by  them  was  that  the  government  should  pay  the 
poor  people  in  a  paper  money,  and  the  rich  in  gold. 
The  bankers  then  advised  creating  paper  bonds 
bearing  interest,  into  which  the  paper  dollars 
might  be  converted. 

The  reader  will  here  notice  the  new  principle  in- 
troduced into  our  money  system.  It  had  been  nec- 
essary under  gold  and  silver  money  to  use  a  substi- 
tute, as  there  was  not  gold  and  silver  money  enough 
in  the  world  to  do  the  business  of  the  world  ;  so 
resort  was  had  to  paper  money,  redeemable  in 
gold.  But  this  paper  money  was  not  money  ;  it 
was  an  au.xiliary  paper  scrip  only,  —  a  promise 
to  pay  money,  and  upon  which  interest  was 
charged.  All  this  paper  money  drew  interest 
from  labor.  It  was  then  proposed  by  Lincoln  to 
issue  a  real  paper  dollar,  which  should  take  the 
place  of  a  metal  dollar,  and  not  draw  interest  from 
labor.  ])iit  here  the  bankers  came  in,  and  took  a 
hand  in  shai")ing  financial  legislation,  which  should 
enable  their  class  to  draw  interest  ujion  paj^er 
dollars  belonging  to  the  ]>co|)le.  To  accomplish 
this  the  new  j^rinciple  of  convertibility,  to  which  I 
have  just  referred,  was  invented  to  take  the  place 
of  redccmability.      liy  re.sorting  to  this  scheme  the 


88  FAJJJXG   rKlCES. 

paper  dollar,  which  it  was  impossible  to  avoid  issu- 
ing, was  to  be  limited  in  volume,  in  order  to  pre- 
vent the  rise  in  wages  and  products,  and  also  to 
force  the  government  to  buy  back  its  own  money, 
to  be  used  over  and  over  again. 

In  order  to  get  this  money  the  government 
issued  a  bond,  drawing  interest,  into  which  this 
paper  money  might  be  converted ;  so  that  while 
the  banker  did  not  draw  interest  direct  from  the 
dollar,  he  manipulated  it  in  its  issue  so  that  he 
received  interest  upon  the  bond.  Not  satisfied 
with  this,  he  induced  the  government  to  allow  him 
to  deposit  this  bond  as  security,  —  still,  however, 
drawing  interest  upon  it, —  and  then  receive  an 
issue  of  money  free,  which  he  could  lend  to  the 
people. 

To  show  the  hollowness  of  the  bankers,  in  their 
pretence  that  the  government  was  not  safe  in 
issuing  paper  money  direct  to  the  people,  which 
the  bankers  knew  would  be  without  interest,  they 
at  once  demanded  that  the  government  issue  paper 
bonds  and  paper  money  to  them,  redeemable  in  the 
very  same  paper  money  they  had  just  pronounced 
unsafe !  This  quieted  them  for  awhile  upon  the 
safety  of  paper  as  compared  with  coin. 

It  was  interest  money  they  were  working  for  at 
that  time,  not  an  "honest  dollar."  They  saw 
that  to  allow  the  American  people  to  issue  their 
own  money  would  be  to  emancipate  the  producing 
and  working  classes  from  the  moneyed  institutions 


OUR   MONEY  A    BANKER'S  MONEY.  89 

of  the  North,  as  effectively  as  the  war  promised  to 
emancipate  the  slaves  from  the  slaveholders  of  the 
South.  This  would  not  do  ;  it  was  too  much  eman- 
cipation going  on  in  the  world  at  one  time  for 
those  using  labor  ;  therefore  they  rushed  in  upon 
the  new  party  of  emancipation,  and  took  control 
of  the  financial  legislation  of  the  country. 

The  Northern  working-men,  knowing  the  slaves 
could  not  read  or  write,  knew  they  were  helpless 
in  their  enslavement  ;  but  these  same  Northern 
working-men  did  not  know  that  all  the  time  they 
were  in  the  ranks,  fighting  for  the  freedom  of  the 
slaves  in  the  South,  there  was  another  class  of 
men,  —  not  Southern  slaveholders,  but  Northern 
would-be  bondholders,  —  in  Congress,  working  for 
laws  which  would  as  effectively  take  the  products 
from  the  Northern  freemen  as  ever  slavery  had 
taken  freedom  from  the  Southern  negroes. 

The  people  know  and  feel  that  something  is 
terribly  wrong.  'J'hey  see  poverty  and  want  ui)(»n 
all  classes  —  save  one;  and  this  one  class,  by 
means  of  laws  favoring  them  alone,  are  rapidly 
piling  up  excessive  riches.  Since  this  class  deals 
in  money  only,  and  since  they  invest  in  bonds 
upon  all  industry  and  enterprise,  always  taking 
profit  (interest)  whether  they  earn  it  or  not  (and 
the  harrlfjr  the  times,  the  inctre  coni|)lctcly  money 
controls  the  situation),  there  has  been  a  suspicion 
that  money  might  be  so  mani])ulate(l  that  the  en- 
terprising, energetic,  and  progressive  business  man 


90  FALLING   PRICES. 

and  manufacturer,  as  well  as  the  working-man,  may 
fall  a  victim  to  the  wiles  of  a  powerful  money 
class  ;  and  it  is  to  these  victims  of  plutocratic 
rapacity  that  I  desire  to  submit  some  interesting 
manipulations  of  our  money,  which  took  place 
some  thirty-five  or  thirty-six  years  ago,  when  all 
the  rest  of  the  country  was  intent  upon  saving 
the  nation,  and  striking  -the  shackles  from  the 
limbs  of  the  enslaved.  I  shall  endeavor  to  show 
how  fiercely  the  "  Copperheads "  and  bankers 
fought  to  defeat  the  vital  principle  in  the  reform 
dollar  created  in  the  interest  of  the  people. 

The  whole  struggle  was  over  the  legal-tender 
clause.  To  clothe  any  form  of  money  made  out  of 
other  than  gold  and  silver  with  a  legal-tender  power 
was  then  being  considered.  In  opposing  this  legal- 
tender  clause,  Vallandigham,  of  Ohio,  said  :  "  He 
objected  to  their  being  called  '  United  States 
Notes,'  instead  of  '  Treasury  Notes,'  as  they  had 
always  been  called,  and  deprecated  the  idea  that 
they  were  likely  to  be  a  permanent  currency,  or  at 
least  until  the  Secretary's  grand  fiscal  machine, 
'  his  magnificent  National  Paper  Mill,  founded 
upon  the  very  stock  provided  for  in  this  bill,  can 
be  put  into  operation.'  He  insisted  that  these 
notes  were  not  money  ;  that  they  would  not  cir- 
culate as  currency,  would  not  be  taken  as  legal 
tenders,  in  discharge  of  judgments  and  contracts 
and  State  debts,  or  private  debts,  though  you  send 
them  forth  bearing  ten  times  the  image  and  super- 


OUR   MONEY  A    BANKER'S  MONEY.  9 1 

scription,  —  that  fair  face  and  form  of  Abraham 
Lincohi,  now  President  and  Czar  of  the  American 
Republic."  Vallandigham  was  a  "Copperhead," 
and  tried  to  cripple  the  government  by  depriving 
it  of  means  to  crush  the  rebellion. 

Mr.  Roscoe  Conkling,  whom  the  New  York 
bank  papers  extolled  to  the  sky,  joined  such  as 
Vallandigham  in  fighting  this  legal-tender  clause 
in  the  bill  creating  the  new  dollar.  He  said  : 
"  Every  agent,  attorney,  treasurer,  trustee,  guard- 
ian, executor,  administrator,  consignee,  commis- 
sion merchant,  and  every  debtor  of  a  fiduciary 
character  who  has  received  for  others  money,  hard 
money,  worth  one  hundred  cents  on  the  dollar, 
will  forever  release  himself  from  liability  by  buy- 
ing up  for  that  knavish  purpose,  at  its  depreciated 
value,  the  spurious  currency  which  we  have  put 
afloat.  Everybody  will  do  it,  except  those  who  are 
more  honest  than  the  American  Congress  advises 
them  to  be.  Think  of  Savings  Hanks  entrusted 
with  enormous  aggregates  of  the  pittances  of  the 
poor,  the  hungry,  the  homeless,  the  stranger,  the 
needlewoman,  the  widow  and  orphan,  and  \vc  ar- 
ranging for  a  robbery  of  ten,  if  not  of  fifty,  jier 
cent,  of  the  entire  amount  !  " 

The  above  is  a  sample  f)f  the  harangues  made 
in  the  interest  of  a  banking  class,  while  our  country 
was  in  the  death-throes  of  a  gigantic  rebellion. 
Picture  to  your  minds  the  "enormous  aggregates" 
of    "the    pittances    of   the    |)oor,   the  hungr)-,   the 


92  FALLIiXG   PRICES. 

homeless,  the  stranger,  the  needlewoman,  the 
widow  and  orphan  "  deposited  in  the  banks ! 
What  sympathy  these  men  had  for  such  can  be 
shown  by  the  fact  that  when  the  loyal  and  honest 
men  in  Congress  wanted  to  pay  the  soldiers  and 
sailors  in  gold,  which  had  been  voted  to  the  money- 
lenders and  the  bankers,  the  tears  of  these  sympa- 
thizers dried  up,  and  they  voted  against  it.  They 
voted  to  pay  the  millionaire  in  gold,  but  to  pay  the 
soldier  and  sailor  in  as  low  as  thirty-eight-cent 
paper  dollars ;  and  any  motion  that  has  since  been 
made  to  make  good  this  robbery  of  the  soldier  and 
sailor  has  been  met  by  a  solid  front  of  the  bank 
representatives  in  Congress,  —  men  who  make 
such  a  plea  for  paying  the  "hungry"  and  the 
"  homeless  "  in  honest  money  !  What  rank  hol- 
lovvncss  and  heartlessness  in  pretence  of  honesty 
and  humanity  in  their  endeavor  to  save  a  moneyed 
aristocracy  !  Compare  with  this  cant  and  hypocrisy 
the  patriotic  and  stirring  sentiments  of  those  fear- 
less men  who  fought  for  the  legal-tender  clause, 
who  believed  in  one  money  for  all,  rich  and 
poor  alike,  and  that  it  was  time  that  exceptions 
in  favor  of  a  moneyed  aristocracy  should  stop. 
I  now  quote  from  Mr.  Kellogg,  of  Ohio,  who 
said  : 


Mr.  Chairman,  I  am  pained  when  I  sit  in  my  place  in  the 
House  and  hear  members  talk  aliout  the  sacredness  of  capi- 
tal ;  that  the  interest  of  nioney  must  not  be  touched.     Yes, 


OUR   MONEY  A    BANKER'S   MONEY.  93 

sir,  they  will  vote  six  hundred  thousand  of  the  flower  of  the 
American  youths  for  the  army,  to  be  sacrificed,  without  a 
blush ;  but  the  great  interest  of  capital,  of  currency,  must 
not  be  touched.  We  have  summoned  the  youths;  they 
have  come.  I  would  summon  the  capital ;  and  if  it  does  not 
come  voluntarily,  before  this  Republic  shall  go  down,  or  one 
star  be  lost,  I  would  take  every  cent  from  the  treasury  of 
the  States,  from  the  treasury  of  the  capitalists,  from  the 
treasury  of  individuals,  and  press  it  into  the  use  of  the 
government. 

Mr.  Blake,  of  Ohio,  said  :  "  We  are  not  legislat- 
ing for  the  money-shavers,  who  oppose  the  bill, 
but  for  the  people,  the  soldiers,  and  the  laboring 
classes." 

Mr.  Spaulding  said :  "  For  myself,  I  prefer  to 
issue  the  demand  notes  based  on  adequate  taxa- 
tion, and  with  the  highest  legal-tender  sanction 
that  can  be  given  them  by  the  government,  placing 
the  soldiers  and  capitalists  all  on  the  same  footing 
in  regard  to  their  notes." 

In  one  of  his  speeches,  Thaddeus  Stevens,  of 
Pennsylvania,  said  :  "Sir,  I  wish  no  injury  to  any, 
nor  with  our  bill  could  any  happen  ;  but  if  any 
must  lose,  let  it  not  be  the  soldier,  the  mechanic, 
the  laborer,  or  the  farmer." 

Thus  it  will  be  seen  that  all  those  advocating 
the  bill  for  this  new  form  of  dollar- — -a  dollar  lor, 
of,  and  by  the  i)eople,  the  whole  people  —  were 
not  only  in  favor  of  making  soldiers  and  sailors, 
but  the  farmer  and  laltorer,  the  etpial  of  the 
money-lending  class;  for  they  knew  that   the  sol- 


94  FALL /AC,    PAVCES. 

diers  and  working  classes,  through  their  necessi- 
ties, would  be  compelled  to  take  any  dollar  that 
might  be  issued  ;  and  there  was  love  of  justice 
enough  in  the  souls  of  those  men  who  were  on  the 
side  of  the  Union,  and  for  the  freedom  of  the  slave, 
to  cause  them  to  resent  the  injustice  of  discrimi- 
nating against  the  weak  and  in  favor  of  the  strong. 
In  the  fight  for  the  creation  of  this  new  dollar,  — 
a  dollar  issued  direct  to  the  American  people,  with- 
out having  them  buncoed  out  of  six  per  cent,  by- 
first  giving  it  to  the  banks  free,  —  no  man  stood 
more  firm  and  determined  than  did  Thaddeus 
Stevens.  Mr.  Stevens  wanted  an  "honest"  dol- 
lar, one  that  banker  as  well  as  farmer  should  be 
compelled  to  take. 

The  American  people  are  greatly  deceived  in 
regard  to  "specie  payments"  and  "resumption." 
About  election  time  we  hear  men  discussing 
finance,  and  declaring  that  "they  want  a  dollar 
that  is  a  dollar  ;  "  that  "  they  want  every  dollar  as 
good  as  a  gold  dollar;"  that  when  they  have  a 
paper  dollar  in  their  hands  "  they  want  to  know 
that  they  can  go  to  the  bank,  or  the  government, 
and  get  a  gold  dollar  for  it."  Do  not  these  men 
know  that  they  cannot  go  to  any  bank,  <?r  the  govern- 
ment, and  compel  tJiem  to  give  gold  for  a  dollar,  or 
for  ten,  tiventy,  tJiirty,  or  forty  dollars  ?  Do  they 
not  know  that  after  about  twenty  years  of  "  re- 
sumption "  it  has  been  proven  that  such  "  resump- 
tion "    is   not   for   the   poor,    but  the   rich  .^     The 


OUR   MONEY  A    BANKER'S  MONEY.  95 

government  could  not  maintain  "  resumption," 
even  in  both  gold  and  sih'er,  for  a  week  if  it  dared 
to  redeem  in  sums  earned  weekly  by  the  working- 
class.  The  man  who  concocted  the  Resumption 
Act  for  specie  payments  did  it,  not  that  the  farm- 
ers or  the  working  people  might  have  "honest" 
money,  but  paper  money,  —  money  like  that  $930,- 
000,000  which  Mr.  Gage  is  now  trying  to  get 
throug-h  Consrress.  Had  the  framers  of  the  Act 
intended  that  the  people  should  have  gold,  they 
would  have  had  sub-treasuries  in  every  city  from 
Maine  to  California,  from  Oregon  to  Texas,  and 
would  have  made  the  amount  to  be  redeemed  less 
than  $50.  Instead  of  this,  however,  the  only 
spot  '  in  the  United  States  where  fifty  or  more 
dollars  can  be  "  redeemed  "  is  Wall  Street,  New 
York  City !  But  neither  the  farmers  nor  the 
working  people  of  this  nation  live  in  Wall  Street 
or  New  York  City.  No,  my  deluded  fellow 
citizens,  resumption  was  not  for  you,  but  for 
Wall  Street  bankers  and  brokers.  I  will  quote 
you   that    part  of   the  Resumption  Act  referring 

'The  Resumption  Act  of  1S75,  making  New  York  the  only 
place  of  redemption,  held  in  force  until  the  Act  of  March  3, 
1887,  by  which  Act  the  Assistant  Treasurer  of  San  Francisco 
was  empowered  to  redeem  notes  in  coin.  These  were  the  only 
places  until  1890  when  an  Act  was  passed  giving  the  Secretary 
of  the  Treasury  the  discretionary  power  to  redeem  notes  in  coin 
through  the  nine  assistant  secretaries  in  the  following  cities : 
New  York,  Uoston,  Baltimore,  Cincinnati,  Chicago,  St.  Louis, 
New  Orleans,  .San   Francisco,  and   I'hiladelphia. 


96  I'ALl.ING   PRICKS. 

to  the  redemption  of  paper  money.      It  is  as  fol- 
lows : 

And  on  and  after  the  first  day  of  January,  A.  I).  1879,  the 
Secretary  of  the  Treasury  shall  redeem  in  coin  the  United 
States  legal-tender  notes  then  outstanding,  on  tlieir  presenta- 
tion for  redemption  at  the  office  of  the  Assistant  Treasurer 
of  the  United  States,  in  the  city  of  New  York,  in  sums  not 
less  than  %^o. 

Yes,  I  repeat,  that  had  that  Act  read  that  every 
National  Bank  in  the  Union  would,  on  the  first  day 
of  January,  1879,  redeem  all  outstanding  notes  of 
every  denomination,  without  restriction,  the  govern- 
ment would  have  had  to  suspend  specie  payments 
in  less  than  two  weeks.  Why,  under  the  present 
law,  in  this  one  place  (the  city  of  New  York),  the 
government  has  been  called  upon  to  redeem  as 
high  as  $15,000,000  in  one  day;  and  at  times  the 
gold  reserve  has  run  down  to  as  low  as  $50,000,- 
000  ;  and,  in  order  to  keep  the  reserve  up  to  the 
$100,000,000  point,  the  government  has  been 
compelled  to  buy  as  high  as  $262,000,000  of 
gold  in  less  than  two  years'  time.  This  shows, 
conclusively,  how  utterly  impossible  it  would  be 
for  the  government  to  attempt  to  redeem  in  small 
amounts,  in  every  part  of  the  nation,  to  all  who 
desire  gold, — which  in  justice  it  should  do,  and 
thus  place  all,  the  rich  and  the  poor,  on  the  same 
footing. 

The  bankers  and  bullionists  understand  this ; 
hence  it  is  that  they  are  so  anxious  to  adopt  some 


OUR   MONEY  A    BANKER'S  MONEY.  97 

"  currency  reform  "  legislation,  to  prevent  the 
people  from  getting  the  gold  from  this  one  place 
only.  To  stop  the  people  from  "  working  this 
endless  chain,"  as  the  gold  men  call  it,  they  have 
concocted  the  plan  which  Secretary  Gage  has  be- 
fore Congress,  and  which  President  McKinley  has 
endorsed  in  his  message  to  Congress.  This  plan 
proposes  to  call  in  $930,000,000  of  different  kinds  of 
money,  and  then  issue  non-taxable,  long-term  bonds, 
interest  and  principal  to  be  payable  in  gold,  and 
upon  these  issue  to  bankers  only  a  non-legal-tender 
paper  currency.  This  would  most  effectively  cut 
the  people  off  from  getting  gold,  and  would  com- 
pel the  American  people  to  pay  nine  per  cent,  to 
get  the  use  of  a  circulating  medium  which  they 
were  already  supplied  with  before  the  (iage  scheme 
was  i)roposed.  This  barefaced  scheme  has  been 
advocated  by  all  the  bank  papers  throughout  the 
length  and  breadth  of  the  land  ;  and  because 
the  Senate  cannot  be  prevailed  upon  to  approve 
this  colossal  fraud  and  robbery  of  the  American 
people,  these  same  bank  papers  denounce  it  in  un- 
measured tones. 

To  show  more  clearly  the  glaring  injustice 
which  this  proposed  scheme  would  work  to  mer- 
chants and  manufacturers,  especially  in  such  a 
depres.sed  state  of  business  as  the  country  is  suf- 
fering from  at  the  present  time,  when  mill-men 
and  merchants  cannot  get  a  "  new  dollar  back  for 
an  (;ld  one,"  it  is   only  necessary  to   state    that    if 


qS  falling  jy^icES. 

these  mills  should  take  a  million  of  dollars  of  these 
same  bonds  to  the  government  as  security,  and 
ask  for  their  face  value  in  money,  without  in- 
terest, in  order  to  help  them  start  up  their  mills 
and  put  the  hundreds  of  thousands  of  suffering 
unemployed  to  work,  they  would  be  politely  in- 
formed that  the  government  is  not  in  the  banking 
business,  —  though  at  the  same  time  it  would  be 
very  evident  that  the  bankers  are  in  the  govern- 
ment business. 

Let  me  emphasize  this  "  Bucket  Shop  "  scheme 
by  an  illustration.  Suppose  the  law  read  that 
cotton  mills  in  the  Southern  States  only  should 
have  this  privilege  to  deposit  bonds  and  con- 
tinue to  draw  interest  upon  them,  and  receive 
their  full  face  in  money  free  of  interest,  simply  be- 
cause the  South  had  a  majority  in  Congress,  and  a 
Southern  man  for  President ;  who  would  coun- 
tenance such  a  monstrous  discrimination  !  Would 
not  such  colossal  injustice  be  apparent  to  every 
one .''  Yet  why  would  it  be  more  unjust  than  the 
proposed  scheme,  which  would  allow  any  one  who 
held  bonds  to  get  this  money  free,  and  cause  all 
those  outside  of  bondholders  to  be  taxed  for  in- 
terest on  that  from  which  they  would  receive  no 
benefit,  and  which  would  put  them  to  a  disadvan- 
tage in  competition  t 

No  !  we  do  not  want  such  systems  in  a  Republic. 
Let  monarchies,  where  such  banking  schemes  were 
hatched,  hold  a  monopoly  on  them. 


OUR   MONEY  A    BANKER'S  MONEY.  99 

That  the  business  men  of  the  country  may 
know  the  importance  of  using  their  influence  and 
vote  for  a  volume  of  money  sufficiently  large  to 
transact  the  business  of  the  nation  (the  same  to  be 
gradually  increased,  to  keep  up  with  the  increase 
of  population  and  extended  trade),  and  to  maintain 
a  fixed  amount  per  capita  to  prevent  shrinkage  of 
values  and  business  depression,  I  will  quote  in- 
cidents in  our  country's  history  showing  that  this 
question  has  at  all  times  overshadowed  all  others, 
and  that  upon  this  depends  the  success  or  over- 
throw of  the  wealth-producer,  or  of  the  wealth 
confiscator.  There  must  always  be  war  between 
these  two  classes  until  one  or  the  other  is  driven 
from  the  face  of  the  earth. 

When  the  bank  power  pounced  upon  Congress 
at  the  time  the  new  monetary  system  was  being 
devised,  Thaddeus  Stevens,  the  "  Grand  Old  Com- 
moner," as  he  was  called,  said,  in  reply  to  a  ques- 
tion from  \V.  D.  Kclley  : 

Yes,  we  have  had  to  yield ;  the  Senate  was  stuliborn. 
We  did  not  yield  until  we  found  that  the  country  must  be 
lost  or  the  banks  gratified  ;  and  we  have  sought  to  save  the 
country  in  spite  of  the  cupidity  of  its  wealthier  citizens. 

On  another  occasion,  when  speaking  upon  the 
bill  to  issue  $900,000,000  legal-tender  money 
direct  to  the  pc(»[)lc  instead  of  to  tlie  banks,  he 
said  : 

The  bill  I  introduced  some  days  since  to  provide 
means  to  defray  the  expenses  of  the  government  produced 


lOO  FALLING   PRICES. 

a  liowl  among  llie  nioney-cliangers  as  hideous  as  that  sent 
forth  by  tlieir  Jewisli  cousins  when  they  were  kicked  out  of 
the  Temple.  It  produced  what  seemed  to  me  an  unac- 
countable excitement  in  financial  circles.  This  was  caused, 
I  suppose,  by  wrong  information  as  to  its  origin  and  under- 
standing as  to  its  object.  This  was  partly  the  fault  of 
letter-writers,  and  partly  the  fault  of  stock-jobbing  money 
editors.  .  .  .  When  this  Congress  assembled  a  year  ago,  all 
the  banks  in  the  Union,  as  well  as  the  government,  had 
suspended  specie  payment.  The  last  #50,000,000  of  loan 
which  had  been  taken  by  the  banks  at  a  discount  of  $5,000,- 
000,  payable  in  coin,  was  no  longer  paid  in  anything  but 
the  currency  of  suspended  banks.  The  immense  expenses 
of  the  government  (from  $2,000,000  to  $3,000,000  daily) 
were  to  be  provided  for.  It  was  impossible  to  negotiate 
loans,  except  at  a  ruinous  discount. 

In  closing  this  speech  he  used  these  prophetic 
words  : 

But  I  ought  to  say,  before  I  close,  to  my  country 
banking  friends,  that  they  need  not  be  alarmed.  There  is 
no  great  prospect  that  we  shall  return  to  the  system 
I  have  indicated,  nor  do  much  to  protect  the  people  from 
their  own  eager  speculations.  When.,  a  few  years  hence,  the 
people  shall  have  been  brought  to  general  bankruptcy  by 
their  nnregulated  enterprise,  I  shall  have  the  satisfaction 
to  know  that  I  attempted  to  prevent  it. 

On  another  occasion  Mr.  Stevens  said  : 

Mr.  Speaker,  I  have  a  very  few  words  to  say.  I  ap- 
proach the  subject  with  more  depression  of  spirits  than  I  ever 
before  approached  any  question.  No  personal  motive  or  feel- 
ing influences  me,  —  I  hope  not,  at  least.  I  have  a  melan- 
choly foreboding  that  we  are  about  to  consummate  a  cun- 
ningly devised  scheme,  which  will  carry  great  injury  and 


OUR  MOXEY  A    BAXKER'S  MONEY.        lOI 

great  loss  to  all  classes  of  the  people  through  this  Union,  ex- 
cept one.  ...  I  have  a  despatch  from  the  Chamber  of  Com- 
merce of  Cincinnati,  sent  to  the  Secretary  of  the  Treasury, 
and  by  him  to  me,  urging  the  speedy  passage  of  the  bill  as  it 
passed  the  House.  It  is  true  there  was  a  doleful  sound 
came  up  from  the  caverns  of  bullion  brokers  and  from  the 
salons  of  the  association  banks.  Their  cashiers  and  agents 
were  soon  on  the  ground,  and  persuaded  the  Senate,  with 
little  deliberation,  to  mangle  and  destroy  what  it  had  cost 
the  House  months  to  digest,  consider,  and  pass.  They  fell 
upon  the  bill  in  hot  haste,  and  so  disfigured  and  deformed 
it  that  its  very  father  would  not  know  it. 

It  must  be  clear  to  any  mind  that  any  power  in 
government  over  which  the  people  lose  control  is 
a  very  dangerous  one  in  a  republic.  Such  a  power 
can  be  maintained  only  through  force,  bribery,  or  by 
secrecy.  In  either  case  the  people  are  justified  in 
overthrowing  it  at  all  hazards.  That  the  dollar  is 
a  power  over  which  the  American  people  have  lost 
control,  in  consequence  of  England's  dictation 
through  agents  holding  power  in  this  nation,  is  a 
familiar  saying  all  over  Europe  ;  and  every  Amer- 
ican travelling  abroad  is  humiliated  and  mortified 
as  he  has  il  Hung  in  his  face  l)y  nearly  all  nation- 
alities except  the  I'Jiglish,  who  stand  ]>y  and  rnjoy 
the  sallies. 

There  has  not  been  one  President  since  Lincoln 
who  has  not  either  vetoed  some  measure  to  issue 
American  money,  or  openly  condemned  what  little 
we  have  of  such  money  already  in  circulation. 
This  is  the  Uritish  power  behind  the  throne.     This 


102  FALLING   PR/CFS. 

question  of  tlie  riglit  of  tlie  American  people  to 
issue  their  own  dollars,  given  to  Iheni  by  the  Con- 
stitution, will  yet  be  the  one  over  which  the  blood 
and  treasure  sacrificed  to  get  rid  of  slavery  will 
be   infinitesimal   in  proportion. 

That  men  can  be  found  who,  for  the  sake  of  be- 
coming President,  will  consent  to  let  England 
dictate  our  dollar,  seems  almost  incredible ;  and 
yet  we  are  told  that  we  cannot  go  ahead  and  coin 
or  issue  our  own  dollar  until  we  get  England's 
consent.  I  quote  from  a  subject  of  England,  the 
Hon.  Isaac  Buchanan,  of  Canada,  who  said : 
"  Money  should  be  a  thing  of,  or  belong  to,  a 
country,  not  of,  or  belonging  to,  the  world.  .  .  . 
An  exportable  commodity  is  not  fitted  to  be  money  ; 
and  nothing  could  be  more  monstrous  than  Eng- 
land's principle,  followed  by  the  United  States  up 
to  the  war,  —  her  legislation  forcing  her  people  to 
be  buyers  of  gold,  one  of  the  scarcest  articles  in 
the  world,  as  the  condition  of  their  being  able  to 
furnish  themselves  with  food  and  clothing." 

It  may  safely  be  said  that  all  distinction  be- 
tween the  classes  and  masses  in  the  Western  world 
to-day  is  the  result  of  their  monetary  systems. 
Were  the  people  enlightened  upon  this  one  ques- 
tion, they  could,  by  an  issue  of  currency  sufficient 
for  the  purpose,  wipe  out  all  distinctions  between 
rich  and  poor.  Society  then  would  rest  on  a 
plane  in  which  the  people  would  all  be  well-to-do, 
and    excessive   riches    or    poverty    would    not    be 


OUR  MONEY  A   BANKER'S  MONEY.        103 

longer  known.  In  fact,  in  1865  all  Europe  be- 
came alarmed  over  the  sudden  riches  coming  to 
their  emigrants,  who  came  to  America  in  an  im- 
poverished condition,  but  in  a  few  years  returned 
rich.  This  caused  such  unrest  among  the  work- 
ing-people of  Europe,  that  their  rulers  plainly  saw 
that  unless  conditions  were  changed  in  America, 
and  her  farmers  and  working  people  reduced  to 
the  conditions  of  those  in  Europe,  it  was  only  a 
question  of  time  when  every  crowned  head  in 
Europe  would  go  off,  and  republics  be  reared  upon 
the  ruins  of  monarchies.  That  was  the  time  when 
the  plot  was  hatched  between  our  rulers  and  those 
of  the  Old  World  to  reduce  our  people  to  the  state 
in  which  we  find  them  to-day.  Hugh  McCullough 
was  the  man  who,  as  Secretary  of  the  United 
States  Treasury,  began  the  work  of  destroying 
the  people's  money,  for  the  purpose  of  carrying 
out  this  diabolical  plot. 

To  show  how  the  people  in  this  country  have  had 
to  battle  to  keep  any  money  at  all  in  circulation, 
the  banks  always  desiring  to  force  bank  credits 
upon  them,  I  will  quote  from  Bcrkcy's  "  Money 
Question,"   page    133.      He  says: 

Tlic  fi;;lit  I)ct\vc(Mi  riesidenl  Jnckson  and  tlie  United 
States  Bank,  whicli  occupied  tlic  attention  of  tiie  people 
for  years,  now  began.  Tlie  specie-basis  .system  had  l)een 
in  operation  for  over  a  quarter  of  a  century,  and  during  tlic 
whole  time  the  country  had  never  once  enjoyed  the  advan- 
tage of  a  sound  currency.     Pecuniary  distress,  periodical 


I04  FALLING   PRICES. 

returns  of  expansion  and  contraction,  deranged  currency, 
ruined  exchanges,  and  panic  and  convulsions  had  character- 
ized the  entire  period.  The  banks,  although  based  on  "  Hard 
Money,"  and  professing  to  pay  coin,  were  in  a  state  of  chronic 
suspension.  The  press  of  the  country  was  completely  sub- 
sidized ;  Congress,  as  well  as  the  Supreme  Court  of  the 
United  States,  did  not  escape  its  contaminating  influence. 
The  people  were  perfectly  helpless,  and  the  outlook  of 
American  freedom  and  independence  was  dark  indeed. 

According  to  Mr.  Berkey,  the  country  then 
passed  through  the  same  fall  in  prices,  the  same 
stagnation  in  business,  and  the  same  loss  to  labor, 
as  it  is  passing  through  to-day.  He  says  :  "  In 
1817  and  1 81 8  the  circulation  was  ^100,000,000, 
and  in  1819  $45,000,000.  Contraction  had  done 
its  work,  and  the  ruin  which  it  had  accomplished 
was  deep  and  widespread.  In  August,  1819, 
twenty  thousand  men  were  seeking  employment 
in  Philadelphia  ;  and  a  similar  condition  of  affairs 
prevailed  in  New  York  and  other  cities.  .  .  . 
Stagnation  and  distress  lasted  throughout  the 
year  1820.  Wheat  was  worth  twenty  cents  per 
bushel  in  Kentucky.  At  Pittsburg  flour  was  one 
dollar  per  barrel,  boards  two  dollars  per  thousand, 
etc."  P\irther  on,  the  author  gives  the  account  of 
a  report  made  by  a  committee  chosen  by  the  Sen- 
ate of  the  Pennsylvania  Legislature  in  February, 
1820.     It  is  in  part  as  follows  : 

I.  Ruinous  sacrifices  of  landed  property  at  sheriffs 
.sales,  whereby  in  many  cases  lands  and  houses  have  been 
sold  at  less  than  a  half,  a  third,  or  a  fourth  of  their  former 


OUR   MONEY  A    BANKER'S   MONEY.         I05 

value,  thereby  depriving  of  their  homes  and  of  the  fruits  of 
laborious  years  a  vast  number  of  our  industrious  farmers, 
some  of  whom  have  been  driven  to  seek  in  the  uncultivated 
forests  of  the  West  that  shelter  of  which  they  have  been 
deprived  in  their  native  State. 

2.  Forced  sales  of  merchandise,  household  goods,  stock, 
and  utensils,  at  a  price  far  below  the  cost  of  production, 
by  which  many  families  have  been  deprived  of  the  common 
necessities  of  life,  and  of  the  implements  of  their  trade. 

Every  chapter  in  history  shows  this  loss  to  mer- 
chants, farmers,  and  laborers  as  the  sure  results  of 
contracting  a  nation's  currency ;  while,  on  the 
other  hand,  we  find  history  gives  us  indisputable 
facts  showing  the  beneficial  results  to  the  same 
classes  from  its  expansion.  The  law  underlying 
the  contraction  and  expansion  of  money,  with  its 
favorable  or  unfavorable  results,  is  just  as  sure  in 
its  effect  as  the  law  controlling  the  jjlancts.  It 
makes  no  difference  whether  or  not  the  material 
be  of  gold,  silver,  or  paper,  the  results  are  the 
same.  The  essential  matter  is  the  volume,  and  not 
tiie  material.  Professor  Walker  sliows  this  in  all 
his  works  on  political  economy.  In  speaking  of 
the  great  production  of  gold,  in  1850,  he  says  : 

The  metallic  inflation  was  most  welcome,  for  it  occurred 
at  a  time  when  commerce  and  production  had  for  a  long 
time  been  suffering  from  a  money-supply,  either  positively 
decreasing,  or,  at  any  rate,  not  keeping  up  willi  the  world's 
needs  in  this  respect.  The  age  had  been  one  of  f;illing 
prices,  with  loud  complaints  of  depression  in  trade  and  fail- 
ure of  employment.      Never  did   parched  ground  reoi)en 


Ib6  FALL/A'G  PRICES. 

more  joyously  to  the  fust  fall  of  rain  after  a  long  drouth, 
than  industry  and  trade  reopened  to  the  new  supplies  of 
gold  from  California  and  Australia. 

From  the  above  it  will  be  seen  that,  according 
to  Professor  Walker,  "  inflation  "  can  come  from 
gold  as  well  as  from  paper  issues.  But  does  the 
distinguished  author  use  the  expression  here  cor- 
rectly.''  "Inflation,"  defined  by  the  dictionaries, 
is  as  follows  :  "  The  state  of  being  inflated  or  dis- 
tended with  air."  How  that  term  can  be  applied 
to  an  increased  volume  of  currency,  especially 
gold,  is  beyond  the  comprehension  of  the  writer. 
Does  it  not  look  like  an  attempt  on  the  part  of  all 
writers  who  are  opposed  to  rising  prices,  which 
result  from  an  increase  of  money  circulafion,  to 
cast  odium  upon  any  movement  to  increase  the 
volume  of  money,  by  prejudicing  the  mind  through 
the  use  of  opprobrious  terms  ?  I  have  shown  that 
great  benefits  always  come  to  the  mass  of  the  people 
of  any  nation  during  periods  of  increasing  money. 
Can  it  be  possible  that  there  is  a  class  to  whose 
interest  it  would  be  destructive,  and  who  therefore 
organize  to  oppose  it ;  and  who,  once  having  the 
organization  strong  enough  to  defeat  any  move- 
ment to  increase  money,  work  to  contract  its  vol- 
ume .-'  It  would  certainly  appear  so.  What  class 
is  it ;  and  what  interest  have  they  that  can  be  best 
served  by  constantly  crying  out  against  "  infla- 
tion.?" 

That  there  is  a  class  in  this  world  —  nay,  in  this 


OUR   MO.VEY  A    BAiVA'ER'S  MONEY.         I07 

country  —  which  is  in  all,  through  all,  and  over 
all  other  classes,  and  known  as  the  moneyed 
aristocracy,  and  which  is  ruled  by  a  Czar,  Em- 
peror, Queen,  or  President,  we  know  full  well, 
whether  the  people  do  or  not.  That  these  rulers 
cannot  become  rulers,  until  they  first  pledge  alle- 
giance to  this  class,  is  a  matter  of  the  world's  his- 
tory. That  these  rulers  cannot  go  to  war  without 
first  getting  consent  of  this  class  ;  that  they  must 
stop  fighting  when  this  class  commands  ;  and  that 
the  terms  of  peace  must  be  first  submitted  to  this 
class,  —  is  also  a  historic  fact. 

Now,  what  interest  is  there  that  can  conflict 
with  the  common  interest  of  all  }  Let  us  suppose 
a  case.  If  a  nation,  for  instance,  should  have  in 
circulation  $1,600,000,000  of  currency,  and  a  mon- 
eyed aristocracy  was  not  in  existence,  but  some 
brainy  "financier"  should  desire  to  create  a 
moneyed  aristocracy,  could  he  not  do  it  by  resort- 
ing to  the  following  scheme  ?  He  might  call  in, 
say,  $930,000,000  of  money  and  destroy  it  ;  giving 
out  to  all  purchasers,  in  place  of  it,  non-ta.xable, 
()iie-hundred-)ear  bonds,  jxiyable  principal  and  in- 
terest in  gold.  P>y  so  doing  the  financier  would 
have  obtained  the  following  results  : 

1.  Nine  hundred  and  thirty  millions  of  prop- 
erty, in  mills,  mines,  and  farloi  ics,  would  be  un- 
loaded on  the  rest  of  the  people,  by  thf)se  selling 
the  same,  to  get  money  to  ])urchase  the  bonds. 

2.  Nine  hundred  and   thirty   millions  of  dollars 


lOS  FAr.rjNG   PRICES. 

in  a  certain  kind  of  investment  would  shirk  taxes, 
this  injustice  and  burden  being  shifted  to  the  rest 
of  the  taxpayers  of  the  country. 

3.  Nine  hunched  and  thirty  niilHons  of  money 
having  been  destroyed,  —  which  money  was  once 
ozoncd  by  the  people,  but  being  superseded  by 
bonds  is  now  ozued  by  the  people,  —  this  same 
people  would  be  placed  at  a  disadvantage  to  the 
extent  of  $1,860,000,000,  having  interest  to  pay 
in  gold  for  one  hundred  years  on  $930,000,000. 

4.  Nine  hundred  and  thirty  millions  of  money 
withdrawn  from  circulation  would  cause  panic,  a 
tumble  in  prices,  the  closing  of  mills,  mines,  and 
furnaces,  and  throw  millions  out  of  employment, 
causing  poverty,  engendering  crime,  creating 
bread-riots,  and  ending  in  shedding  of  blood. 

5.  Nine  hundred  and  thirty  millions  of  bonds 
would  be  in  existence,  the  holders  thereof  ex- 
empted from  taxes,  protected  from  falling  prices 
of  all  other  forms  of  property  and  commodities, 
and  placed  in  a  position  to  take  advantage  of  the 
falling  prices  in  cost  of  living. 

This  class  would  at  once  become  the  moneyed 
aristocracy  of  the  nation  ;  and  this  is  the  class 
whose  interest  it  would  be  to  oppose  any  increase 
of  the  volume  of  a  nation's  money,  by  which  the 
prices  of  its  commodities  and  labor  would  be 
raised,  thus  in  time  enabling  the  people  to  pay  off 
the  unrighteous  debt  forced  upon  them  by  an 
unscrupulous  financier. 


OUR   MONEY  A    BANKER'S  MONEY.         lOQ 

There  are  only  two  classes  which  stand  in  the 
way  of  preventing  the  creation  of  this  moneyed 
aristocracy  in  a  nation.  One  is  an  illiterate  class, 
which  cannot  read  ;  and  the  other  is  a  class  made 
up  of  all  callings,  which  while  they  can  read  will 
not  read,  and  too  often  insult  the  men  who  have 
made  a  special  study  of  the  question  at  great  per- 
sonal sacrifice.  It  is  this  latter  class  upon  which 
the  greater  responsibility  rests,  for  the  former 
class  is  often  led  by  the  action  and  advice  of  the 
latter. 

It  is  a  very  serious  matter  to  see  a  nation  of 
seventy  millions  of  people  delivered  into  the  hands 
of  a  moneyed  aristocracy  ;  changed  from  a  nation 
out  of  debt,  prosperous,  making  strides  beyond 
any  nation  at  any  time  in  the  world's  history,  to  a 
nation  of  debtors,  and  becoming  more  and  more 
dependent  upon  other  nations  of  the  earth.  What 
a  spectacle  to  see  the  rulers  of  a  great,  rich  nation 
like  ours  made  the  minions  of  a  moneyed  aristoc- 
racy, which  is  constantly  appealing  to  the  people 
to  keep  the  nation's  credit  good,'  and  at  the  same 
time  refusing  to  coin  a  constitutional  money  to 
enable  the  people  to  pay  their  debts,  —  thus  forc- 
ing the  nation  to  go  begging  of  other  nations  to 
furnish  it  with  money  on  credit ! 

•  While  United  .States  bonds  were  selling  on  the  London  mar- 
ket twenty  per  cent,  above  par,  which  was  eight  per  cent,  higher 
than  the  securities  of  any  other  nation,  these  Shylocks  were 
appealing  to  the  people  to  strengthen  the  nation's  credit  I 


no  FALLING   PRICES. 

Yet  this  is  exactly  the  case  in  this  nation  to- 
day. Our  mountains  are  stocked  with  silver 
which  would  make  money  good  enough  for  mer- 
chants, good  enough  for  the  farmer,  good  enough 
for  the  laborer,  but  not  good  enough  for  this  ill- 
begotten  moneyed  aristocracy,  —  a  class  which  is 
by  self-interest  and  nature  opposed  to  a  republican 
form  of  government,  natural-born  worshippers  of 
monarchs  and  dictators,  always  favoring  standing 
armies,  and  opposed  to  free  schools.  As  a  class, 
they  will  see  the  people's  interests  sacrificed  ;  will 
see  their  lands  given  away ;  will  see  all  nations 
combine  to  rob  the  producers  of  this  country,  and 
obstruct  any  movement  in  legislation  intended  to 
benefit  the  people. 


CHAPTER  VI. 

A    MONETARY    SYSTEM    WHICH    ^VILL    RESTORE 
PROSPERITY. 

The  thing  most  needed  above  all  others,  in  or- 
der to  restore  values  and  the  return  of  permanent 
prosperity,  is  a  distinctiv'ely  American  monetary 
system,  one  characteristic  of  our  institutions  and 
people. 

The  monetary  system  in  vogue  to-day  belongs 
to  the  Old  World's  monarchies  and  despotisms, 
and  can  never  fit  into  our  free  institutions.  There- 
fore we  should  at  once  devise  a  dollar  based  upon 
an  American  monetary  system,  which  will  serve 
all  classes  and  all  men  alike,  and  which  will  sup- 
ply a  sufficiency  in  quantity  of  currency  to  enable 
the  producer  and  laborer  to  retain  the  fruits  of 
their  labor.  To-day  they  are  compelled  to  part 
with  such  a  large  portion  of  their  labor  to  obtain 
this  currency  that,  as  a  consequence,  they  are  left 
without  any  accumulated  property  u[hu\  which  t(^ 
depend  in  their  old  age. 

Our  country  is  one  of  the  largest  and  grandest 
on  the  face  of  the  globe.  Our  people  are  ener- 
getic and  enterprising,  possessing  an  inventive 
I II 


112  FALLING   PRICES. 

genius  which  leads  all  other  nations  in  mechanical 
art  and  device  in  overcoming  natural  resistance. 
We  have  an  area  of  country  exceeding  five  bil- 
lions of  square  miles,  which  is  capable  of  sustain- 
ing a  population  of  over  four  hundred  millions. 
\Vc  have  forty-seven  States,  one  of  which  is  equal 
in  size  to  England,  Scotland,  Ireland,  Wales,  Bel- 
gium, Holland,  and  Portugal  combined.  Our 
resources  in  natural  wealth  are  limitless ;  and, 
taken  as  a  whole,  our  climate  is  not  excelled  by 
that  of  any  other  nation.  We  have  every  variety 
of  soil,  immense  forests,  mighty  rivers,  and  grand 
lakes,  — yes,  inland  seas,  many  of  them  connecting 
with  the  ocean.  We  have  a  sea-coast  extending 
over  six  thousand  miles,  with  convenient  harbors 
which  could  give  shelter  to  the  fleets  of  the  world. 
The  agricultural  resources  of  our  country  are 
almost  boundless,  and  in  great  sections  of  the 
country  our  soil  is  rich  beyond  that  of  all  other 
nations.  We  have  an  inexhaustible  supply  of 
coal,  iron,  copper,  lead,  zinc,  gold,  and  silver ; 
and  other  minerals  are,  comparatively  speaking, 
equally  abundant.  Colorado,  New  Mexico,  Ne- 
vada, and  the  Pacific  States  have  mountains 
packed  full  of  the  precious  metals,  besides  being 
rich  in  arable  lands.  The  South  is  famous  for  its 
cotton,  rice,  sugar,  and  tobacco.  The  great  North- 
ern portion  of  our  country  has  an  inexhaustible 
supply  of  coal,  iron,  salt,  and  petroleum.  The 
great  central  West  is  known  the  world  over  for  its 


A    MONETARY  SYSTEM.  II3 

wheat,  beef,  corn,  and  pork ;  while  the  East  has 
outrivalled  the  leading  nations  in  its  manufacture 
of  nearly  every  article  in  human  use.  As  for  pub- 
lic utilities,  no  nation  on  earth  can  compare  with 
ours. 

Yet,  with  all  this  showing  of  wealth  and  power, 
with  seventy-five  millions  of  people  and  seventy- 
two  billions  of  wealth,  we  still  have  a  class  of 
politicians  and  bankers  who  incessantly  harp 
upon  the  money  system  of  luigland,  and  con- 
tend that,  unless  we  adopt  the  same  material 
for  our  dollar  which  she  uses  for  hers,  wo  shall 
become  a  bankrupt  and  ruined  nation.  Think  of 
such  an  absurdity! — a  nation  one-sixth  as  large 
as  one  of  our  forty-seven  States  must  be  taken 
by  us  as  the  model,  if  not  the  unquestioned 
authority,  in  regulating  our  financial  affairs  ! 

There  is  no  time  to  be  lost  in  this  matter. 
Already,  under  our  present  British  monetary  sys- 
tem, we  find  our  values  sunk  to  a  point  at  which 
our  annual  products  pass  from  the  hands  of  the 
producer  into  the  hands  of  the  non-producer ; 
already  we  see  our  great  mills  forced  to  sus- 
pend, or  to  reduce  wages  and  expenses,  even  to 
hold  their  capital  intact,  and  our  working-people 
brought  to  the  very  verge  of  starvation.  What 
a  picture  this,  in  a  country  of  such  bouniUess 
resources!  Under  this  system,  every  cai)italist 
whose  cajiital  is  invested  in  productive  enterprise, 
and   every  mcrcliant   and   business   man,  is  threat- 


114  FALLING  PRICES.  ^ 

ened  with  bankruptcy  and  ruin.  In  consenting  to 
allow  England  to  dictate  our  dollar,  we  are,  as  it 
were,  selling  to  her  by  the  bushel  the  size  of 
which  she  dictates,  —  a  size  which  holds  double 
the  bulk  of  that  upon  which  our  contract  was 
made ;  thus  we  part  with  two  bushels  in  bulk, 
and  get  credit  for  one  only. 

The  time  is  very  opportune  to  correct  this 
injustice,  when  the  financiers  of  the  nation  are 
attempting  to  reform  our  currency  laws  so  as  to 
make  them  more  English.  Let  us,  on  the  con- 
trary, as  Americans,  make  them  distinctively  and 
decidedly  American,  in  the  interest  of  Ameri- 
can producers  and  not  of  English  investors. 
The  way  to  do  this  is  to  make  a  dollar  which 
will  not  leave  our  shores,  not  one  which  all  the 
nations  of  the  earth  are  constantly  trying  to  take 
from  us,  —  thereby  forcing  us  to  send  more  big 
bushels  of  products,  or  issue  upon  issue  of  bonds 
on  which  our  children  and  children's  children 
must  perpetually  pay  usurious  interest.  It  is 
time  that,  as  patriotic  Americans,  we  stopped 
this  wicked  work  on  the  part  of  those  who  wor- 
ship dollars  only,  and  know  not  country  or  hu- 
manity. 

The  American  dollar  should  be  made  of  paper, 
and  should  be  stamped  thus  : 

ONE  DOLLAR. 
UNITED  STATES  OF  AMERICA. 


A   MO  ATE  TARY  S  YS  TEM.  I  1 5 

This  is  all  a  gold  dollar  has  on  it,  and  it  is  all 
that  is  necessary  for  a  paper  dollar. 

It  may  be  well  to  call  the  reader's  attention  to 
the  fact  that  the  material  suggested  for  this  dollar 
is  precisely  the  same  as  that  recommended  by 
Secretary  Gage  in  his  plan  to  issue  nine  hundred 
and  thirty  million  dollars  to  take  the  place  of 
those  now  in  use  ;  and  since  this  kind  of  material 
is  indorsed  by  such  high  authority,  and  since  the 
people  have  practically  known  no  other  than  paper 
dollars  in  their  business  transactions,  it  would 
be  safe  to  conclude  that  the  question  of  material 
—  one  which,  so  far  as  a  national  currency  is  con- 
cerned, the  Constitution  leaves  in  the  hands  of 
Congress  —  is  therefore  by  common  consent,  and 
by  its  general  use,  practically  settled. 

The  next  question,  then,  which  presents  itself  is 
that  of  the  purchasing  power  of  the  dollar.  The 
legal-tender  power  settles  its  debt-paying  capacity 
to  rich  and  poor  alike  ;  but  the  purchasing  power 
is  another  and  a  very  important  matter  to  be 
looked  after  in  the  creation  of  the  dollar. 

In  regard  to  this  power,  class  interests  have 
fiercely  raged  for  centuries  ;  for  in  no  other  in- 
terest in  life  is  there  so  much  at  stake  as  in  this 
greater  or  lesser  degree  of  the  purchasing  power 
of  the  people's  dollar.  Never  before  in  the  history 
of  any  nation  have  we  had  the  sj^cctacle  of  a  whole 
people  arrayed  in  two  classes,  one  against  the 
other,  over  the  greater  or  lesser  purchasing  power 


I  l6  FALLING   PRICES. 

of  their  dollar  ;  but  this  contest,  now  fairly  on, 
must  surely  continue  until  it  shall  be  settled  on 
the  basis  of  patriotism,  common  sense,  and  jus- 
tice. 

This  is  a  question  between  the  producer  and 
the  non-producer ;  a  question  between  the  man 
who  works,  and  the  man  who  does  not  work. 
Under  the  present  crude  and  unequal  social  sys- 
tems, the  man  who  must  work  has  labor  to  sell ; 
while  the  man  who  does  not  work  has  dollars  to 
sell.  Both  want  the  highest  possible  price,  or 
purchasing  power,  for  that  which  they  have  to 
dispose  of ;  hence  we  have  the  men  who  are  the 
advocates  of  the  rich,  the  men  who  have  no  labor 
to  sell,  declaring  for  the  dearest,  the  •'  best " 
money  used  in  any  civilized  nation  on  earth ; 
while,  on  the  other  hand,  the  men  who  are  cham- 
pions of  the  producers  and  laborers  want  that 
money  which,  both  in  its  quality  and  quantity, 
shall  be  such  as  will  stimulate  production,  and 
enhance  the  price  of  that  which  is  produced. 

This  brings  us  into  a  field  where  we  find  idle- 
ness, luxury,  and  indulgence  on  the  one  hand,  and 
toil,  hardship,  and  production  on  the  other.  Here 
we  may  erect  a  pair  of  scales,  on  one  end  of  which 
we  put  dollars,  representing  the  former  class  ;  and 
on  the  other  products,  representing  the  latter  class. 
These  scales  are  like  all  others,  —  when  one  end 
goes  uj),  the  other  goes  down.  They  would  not 
be  scales  if  both  ends  went  up  or  went  down  at 


A   MONETARY  SYSTEM.  WJ 

the  same  time ;  for  in  such  scales  it  would  be 
impossible  to  weigh  or  adjust  differences  between 
certain  quantities.  It  is  a  fixed  and  unchangeable 
law  that  when  money  is  "bad,"  labor  is  good,  and 
that  when  money  is  "good,"  labor  is  bad,  —  using 
language  applied  to  money  to  denote  its  worth  or 
worthlessness.  In  other  words,  cheap  money 
means  high-priced  labor ;  and  dear  money  means 
low-priced  labor. 

This  issue  between  cheap  money  and  dear 
money  was  what  divided  the  two  great  parties  in 
the  last  Presidential  election.  It  was  a  peaceable 
battle  between  labor  and  interested  capital  for  the 
control  of  the  dollar  and  all  which  it  stands  for. 
It  is  by  this  battle  of  ballots  that  the  question  of 
the  purchasing  power  of  the  dollar  must  be  settled 
in  a  republic  under  free  institutions.  In  mon- 
archies and  despotisms,  where  the  laboring  classes 
are  never  consulted,  and  where  the  dollar-class  fix 
arbitrarily  upon  the  dearest  dollar  that  can  be 
found,  some  other  and  perhaps  less  peaceable 
method  of  settling  this  question  will  be  adopted. 

After  tlic  battle  has  been  settled  at  the  ballot- 
box,  the  question  then  will  come  uj^  in  Congress, 
which,  according  to  the  Constitution,  has  the  right 
"  to  coin  money,  regulate  the  value  thereof,  and  of 
foreign  coin,  and  fix  the  standard  of  weights  and 
measures."  'i'here  is  nothing  in  the  Constitution 
dictating  the  material  out  of  which  the  dollar  shall 
be  "coined."     That  is  a  i)rcrogative  left  entirely 


I  I  8  FALL/ AG    rkWC/CS. 

with  Congress  ;  and  the  Congress  is  elected  by 
the  people.  The  party  having  a  majority  will 
therefore  be  called  on  to  regulate  the  purchasing 
power  according  to  their  most  enlightened  judg- 
ment. Since  volume  and  not  the  material  gives 
or  takes  from  the  purchasing  power  of  a  dollar, 
—  and  upon  this  all  stand  agreed,  —  and  as  expan- 
sion makes  the  dollar  cheap  and  contraction  makes 
it  dear,  the  volume  of  the  currency  must  be 
adjusted  to  the  population,  or  to  the  plain  exigen- 
cies of  the  actual  business  of  the  country. 

Such  a  currency  is  that  which  Lincoln  and  the 
truly  loyal  men  of  the  early  Republican  party 
desired  to  give  the  people ;  but  they  finally  were 
brought  to  compromise  with  the  money  power, 
fearing  otherwise  to  jeopardize  the  Union  and  the 
freeing  of  slaves.  As  a  result  of  that  compromise 
we  have  to-day  only  $340,000,000  of  that  currency 
in  circulation,  as  a  surviving  test  of  its  sui^eriority ; 
whilst  the  money  the  bankers  fought  for  we  were 
compelled  to  send  abroad  two  years  ago  and  buy 
$262,000,000  worth  of  gold,  for  which  we  now 
have  outstanding  $262,000,000  of  ten  to  thirty 
years'  bonds,  which  we  must  pay  with  interest. 
If  the  money  of  the  early  Republicans  had  been 
retained  as  a  currency,  instead  of  issuing  these 
bonds,  we  should  have  issued  paper  dollars,  and 
avoided  selling  our  children  into  bondage.  These 
dollars,  in  sufficient  volume  to  restore  values  to 
their  normal  level,  would  cause  every  man  to  turn 


A   MONE TARY  SYS TEM.  I  1 9 

buyer  in  order  to  protect  himself  against  higher 
prices.  Labor  would  be  employed  to  make  goods 
ahead,  to  avoid  paying  an  advance  in  wages.  The 
raw  material  and  labor  market  would  soon  be 
exhausted,  and,  instead  of  seeking  a  market,  they 
would  now  be  sought  for  by  a  market  in  need  of 
labor  and  material.  Thus  it  will  be  seen  that  an 
ample  and  sufficient  currency  would  completely 
reverse  the  tables,  —  the  manufacturers  and  mer- 
chants dictating  the  price,  instead  of  selling  to  a 
market  already  overstocked  and  with  but  small 
demand. 

The  corrective  remedy,  therefore,  for  the  fall  of 
prices  and  a  consequent  depression  in  business  is 
to  increase  the  volume  of  money,  until  prices 
advance  to  tliat  point  for  labor  and  material  where 
a  sufficiency  of  it  will  be  left  in  the  consumers' 
hands  to  enable  them  to  relieve  the  market  of 
accumulated  goods. 

The  two  great  factors,  then,  in  preventing  or  in 
causing  falling  prices  and  consequent  hard  times 
are  money  and  labor.  While  the  former  (money) 
is  an  adjustable  instrument  intended  to  raise  or 
lower  the  prices,  the  latter  (labor)  is  a  fi.ved  factor, 
a  natural  law,  and  must  be  conformed  to  ;  other- 
wise friction,  causing  heat  and  disintegration,  takes 
place. 

An  enemy,  as  an  oiler,  on  board  of  one  of  our 
battle-shi|)S,  could  soon  put  all  the  machinery  out 
of  order  and  have  the  ship  at  his  mercy,  l)y  stint- 


I20  FALLING  PRICES. 

ing  or  withholding  sufficient  oil  ;  while  a  waste  of 
oil  could  only  result  in  the  bare  cost  of  the  lubri- 
cant, the  test  of  the  sufficiency  being  in  the 
smooth  and  noiseless  running  of  the  same  with 
maximum  results.  So  with  money  and  labor : 
money  must  be  in  sufficient  volume  to  sustain 
values.  Plethoric  banks  full  of  money  play  no 
more  of  a  part  in  proving  it  is  not  money  that  is 
needed,  than  would  the  machinery  of  the  ship  drip- 
ping with  oil,  while  the  little  oil-cups  and  feed- 
holes  were  all  dry,  afford  an  argument  that  the 
cause  of  the  heating  of  the  bearings  of  the  ma- 
chinery could  not  be  from  want  of  oil.  The  right 
thing  in  the  right  place  is  what  is  needed  ,at  all 
times;  and  "the  banks  being  full  of  money," 
which  is  a  stock  phrase  of  so  many  the  moment 
insufficiency  of  money  is  mentioned,  does  not 
meet  the  case,  for,  at  the  same  time  the  markets 
are  congested  with  goods  and  food,  it  will  be  found 
that  the  working-people  are  hungry  and  in  rags, 
and  upon  investigation  it  will  be  discovered  that 
there  is  no  money  in  their  pockets.  It  can  be 
seen  at  a  glance  that  the  "oil"  has  not  been 
placed  in  the  right  place  to  start  trade,  to  enable 
the  people  to  procure  that  for  which  they  are  in 
the  direst  need. 

At  this  point,  however,  a  dozen  rich  men  spring 
to  their  feet  and  say,  "  What !  take  the  money 
from  the  banks  and  put  it  in  the  pockets  of  the 
workers  ?  "      No,  not  that  ;  but  maintain  a  volume 


A    MONETARY  SYSTEM.  121 

of  money  sufficiently  large  to  keep  prices  to  that 
point  where  it  would  leave  the  producers  and  la- 
borers with  sufficient  margin  to  accumulate  some- 
thing in  their  pockets  beyond  the  supply  of  their 
daily  wants.  Then  the  money  would  not  be  con- 
gested in  the  banks,  nor  the  goods  in  the  stores, 
and  the  want  and  misery  so  often  falling  upon  the 
working  classes  would  be  avoided. 

The  remedy,  then,  which  would  correct  nine- 
tenths  of  our  commercial  and  industrial  distress, 
would  be  as  follows  :  Increase  the  volume  of  the 
nation's  currency  until  prices  of  all  property,  com- 
modities, and  labor,  have  risen  to  the  point  where 
money  accumulates  in  the  pockets  of  the  masses 
instead  of  glutting  the  vaults  of  the  banks, — 
which  means  profits  to  the  rich,  and  which  can 
only  come  from  contracting  the  currency  to  such 
a  small  volume,  and  reducing  prices  so  low,  that  it 
leaves  nothing  in  the  pockets  of  workers. 

The  only  guide  I  can  suggest  to  indicate  when 
a  sufficient  volume  of  currency  has  been  issued,  is 
the  material  well-being  of  the  wealth-producing 
and  laboring  classes  of  the  nation.  When  every 
farmer  owns  a  good  farm,  and  every  workman 
owns  his  home,  and  that  home  comfortable  and 
convenient,  commodious  and  well  furnished  ;  when 
every  working-man  can  afford  to  be  the  father  of 
a  family,  and  is  possessed  of  means  surricicnt  to 
give  his  children  a  liberal  education,  -  then  we 
may  be  confident  th:il  our  national  linaiucs  are  in 


122  FALLING   PRICES. 

a  sound  condition.  When  those  who  create  the 
wealth  of  the  nation,  who  constitute  eight-tenths 
of  the  people  in  it,  shall,  under  the  unwritten  law 
decreeing  "  the  greatest  good  to  the  greatest  num- 
ber," receive  their  proper  and  equitable  share  of 
that  wealth,  the  benefit  which  would  accrue  to  the 
country  from  such  a  percentage  of  its  people  en- 
joying prosperity  would  make  it  impossible  that 
the  remaining  one -tenth  could  experience  any 
great  hardship,  no  matter  what  the  system  that 
produced  these  results  might  be. 

Paper  money  is  a  popular  money  with  the 
masses.  It  is  only  our  foreign  population  who 
hold  to  the  European  idea  of  having  something  of 
value  in  the  material  of  which  money  is  coined. 
It  is  an  absurd  idea  that  a  dollar  which  may  be 
taken  to  settle  a  debt,  and  instantly  handed  to 
another  to  square  another  account,  and  so  go  on 
indefinitely  settling  accounts,  until  at  last  it  finds 
its  way  into  the  post-office  for  a  dollar's  worth  of 
stamps,  —  when,  so  far  as  redemption  is  concerned, 
it  is  redeemed,  —  yes,  I  repeat,  it  is  absurd  that 
such  a  dollar  must  be  a  commodity  of  the  value  of 
one  dollar,  when  it  bears  the  government's  stamp 
declaring  it  a  dollar. 

Paper  has  many  advantages  over  metal  as  a 
material  out  of  which  to  make  a  dollar.  It  is 
more  convenient,  as  large  amounts  can  be  carried 
on  the  person  by  using  bills  of  large  denomina- 
tion.     It  also  baffles    the   counterfeiter.      Upon 


A    MOXETARY  SYSTEM.  1 23 

this  important  matter  Mr.  Alexander  Del  Mar,  in 
his  able  work  on  the  "  Science  of  Money,"  says  : 
"  The  silk-threaded  distinctive  fibre  paper,  the 
water-marks,  the  printing  in  colors,  the  highly 
artistic  vignettes,  the  geometrical  lathe-work,  the 
numbers,  signature,  and  other  mechanical  safe- 
guards of  the  paper-note  render  it  far  more  diffi- 
cult to  imitate  than  coin." 

Paper  money  in  different  forms  is  not  a  new 
idea  in  the  world's  history.  Our  own  history 
goes  to  show  that  when  paper  money  was  used  as 
a  substitute  for  metal,  and  not  a  promise  to  pay 
metal  on  demand,  it  proved  itself  the  most  reliable 
of  all  moneys.  The  experience  of  the  Republic 
of  Venice  was  perhaps  the  most  remarkable  in 
demonstrating  this  principle.  In  regard  to  this 
historical  event  I  will  quote  from  the  writings  of 
the  Hon.  John  Davis,  M.  C,  as  follows  : 

The  history  of  the  Republic  of  Venice  shows  that  it 
was  the  great  commercial  nation  of  the  earth  for  centuries, 
and  its  maritime  wars  were  necessary  for  the  protection  of 
its  extended  commerce  in  every  quarter  of  the  known 
world.  In  the  year  i  171,  intrinsic  money  utterly  failed  to 
meet  the  monetary  requirements  of  the  Republic,  and  a 
hook  of  credit,  or  inscription  money,  was  adopted.  This 
in.scription  money  had  no  material  value  whatever.  It  was 
not  redeemal)le  in  coin  or  bullion,  and  there  was  no  pre- 
tence that  it  would  he  so  redeemed:  liut  it  was  receivable 
in  the  revenues  of  j(ovcrnment,  and  lc;;al  tender  for  all 
debts.  That  legal-lender  quality,  in  tiie  language  of  Mr. 
Franklin,  was  "greater  advantage"  than  coin  redemption. 


124  FALLING   PRICES. 

For  six  hundred  years  that  paper-credit  money  ruled  twenty 
per  cent,  above  coin.  During  all  the  time  there  was  not  a 
money  panic  in  the  country.  Venice  became  and  remained 
the  centre  of  commerce  and  the  clearing-house  of  the  world. 
There  is  not  a  line  or  record  that  any  citizen  of  Venice  was 
dissatisfied  witli  their  financial  system.  This  is  the  longest 
and  most  satisfactory  continuous  financial  experience  re- 
corded in  history,  and  it  proves  very  conclusively  the  supe- 
riority of  financial  or  fiat  money  over  intrinsic  money  in 
times  of  war. 

By  the  above  quotation  the  reader  can  see  that 
full  legal-tender  money  stood  the  shock  of  battle, 
and  was  always  at  a  premium  for  a  period  of  six 
hundred  years.  Now,  would  it  not  be  strange  if 
the  people  of  this  nation  could  not  in  a  time  of 
peace  use  a  money  composed  of  paper,  —  a  money 
for  which  everything  we  could  wish  was  pledged 
to  redeem  at  sight  ^  I  feel  it  is  left  for  this 
republic  to  demonstrate  to  the  world  that  it  can 
have  a  people's  money  composed  of  any  material 
they  see  fit  to  choose,  without  asking  the  consent 
of  the  tottering  thrones  of  the  Old  World. 


CHAPTER  VII. 

BIMETALLISM    AS    A    CURE. 

Having  given  attention  to  the  many  and  vari- 
ous theories  put  forth  by  different  party  creeds 
and  schools  in  regard  to  the  great  fall  in  prices 
during  the  past  thirty  years,  I  will  now  proceed 
to  speak  of  that  one  which  of  all  others  has  the 
greatest  amount  of  approval  and  support  among 
all  parties,  —  namely.  Bimetallism. 

There  is  not  a  party  that  has  not  been  rent 
or  torn,  in  its  conventions,  upon  this  question  of 
Bimetallism.  In  the  struggle  of  1896  the  na- 
tional Prohibition  Convention  was  split  in  two, 
and  broken  up.  The  Republican  Convention  was 
seriously  convulsed,  and  a  portion  of  its  delegates 
walked  out  of  the  convention.  The  national 
Democratic  Convention  shared  the  same  fate,  and 
was  equally  distressed  in  witnessing  the  with- 
drawal of  many  of  its  former  sup])()rters. 

One   significant    fact    regarding   Bimetallism    is 

this,  —  that    while    all     |)arlies    and    factions    are 

agreed   upon  it  as  a  potent   remedy  loi    our  linan- 

cial  distress,  they  diller  as  to  \\]c  policy  ol  adopl- 

'-5 


126  FALLING   PRJCES. 

ing  it  without  cooperation  with  other  nations. 
That  this  one  great  question  is  preeminent  and 
overshadows  all  others  needs  no  proving.  Iwen 
the  party  elected  to  power  in  the  great  contest 
of  1896  had  the  following  plank  in  its  convention 
platform :  "  We  are,  therefore,  opposed  to  the 
free  coinage  of  silver,  except  by  international 
agreement  with  the  leading  nations  of  the  world, 
which  %ve  pledge  ourselves  to  promote!'  It  will  be 
seen  by  this  that  the  Republican  party  desired  to 
have  free  coinage,  but  that  they  desired  other 
nations  to  join  us  in  adopting  it ;  and  they  not 
only  promised  "to  promote"  it,  but  President 
McKinley  appointed  a  commission  to  go  abroad 
to  urge  it  upon  European  nations.  Thus,  by  the 
action  of  their  national  convention,  as  well  as  by 
that  of  their  party  leaders  after  the  election,  it  is 
plainly  evident  that  Republicans  do  not  believe  it 
wrong  to  coin  a  "  fifty-cent  dollar,"  and  try  even 
to  induce  other  nations  to  join  ours  in  doing  the 
same. 

To  show  still  more  plainly  that  the  Republican 
party  are  in  favor  of  Bimetallism,  I  will  quote 
from  a  national  campaign  text-book  sent  out  by 
the  national  and  general  Republican  Committee, 
the  latter  consisting  of  one  member  from  each 
State.  On  page  27,  in  heavy-faced  type,  it  says  : 
"  Bimetallism,  .  .  .  the  use  of  both  gold  and  sil- 
ver as  money,  the  use  for  which  the  Republican 
party  are  to  contend  in   1896."     It  is  safe  to  say 


BIMETALLISM  AS   A    CURE.  12/ 

that  had  not  the  Republican  party  committed 
itself  to  Bimetallism  in  some  form,  it  could  not 
have  carried  a  single  Western  or  Northwestern 
State,  so  thoroughly  grounded  in  the  conviction 
are  the  people  of  these  sections  that  Bimetallism 
is  essential  to  the  restoring  of  prices  and  pros- 
perity. 

I  quote  further  from  page  29  of  the  same  book, 
where  Sir  William  Houldsworth,  a  delegate  of 
Great  Britain  to  the  Brussels  monetary  confer- 
ence, 1892,  is  reported  as  saying:  "A  further 
fall  [in  the  level  of  prices]  would  be  a  disaster. 
I  frankly  admit,  that,  in  my  opinion,  there  will 
never  be  a  permanent  solution  of  this  difficulty 
until  we  have  an  international  bimetallic  agree- 
ment." 

Again,  on  page  28  of  the  same  book  will  be 
found,  in  the  letter  of  instruction  to  connnis- 
sioners  of  the  Bru.ssels  conference,  the  following  : 
"  It  is  the  opinion  of  the  President,  and,  as  he 
believes,  of  the  people  of  tJie  United  States  xvith 
singular  unanimity,  that  a  full  use  of  silver  as  a 
coined  metal,  at  a  ratio  to  gold  to  be  fi.xed  by  an 
agreement  between  the  great  commercial  nations 
of  the  world,  would  very  highly  promote  the  pros- 
perity of  all  the  people  of  all  the  countries  of  the 
world."  The  italics  are  mine.  Wy  these  quota- 
tions I  desire  to  show  that  Bimetallism  has  not 
only  the  sanction  of  the  Republican  party,  but 
that  it  has  the  greatest    iollowing  of  any  theory 


128  FALLING   PRICES. 

as  being  the  true  reincdy  to  stop  the  downward 
trend  of  values. 

We  know,  by  the  actual  votes  cast,  that  the 
Democratic  party  stands  committed  to  Bimetal- 
lism by  a  vote  of  six  million  five  hundred  thou- 
sand for  it,  to  one  hundred  and  thirty -seven 
thousand  against  it.  We  also  know  that  the 
Populist  party  stands  unitedly  for  it;  while  nearly 
all  the  Labor  Conventions  have  passed  resolutions 
indorsing  it. 

Therefore,  whatever  the  intrinsic  merits  of  Bi- 
metallism, we  must  acknowledge  it  has  the  great- 
est of  all  other  followings  in  regard  to  the  cause 
and  cure  of  our  present  depression. 

That  there  is,  however,  in  the  ranks  of  the 
Bimetallists,  a  great  diversity  of  views  in  regard 
to  the  extent  to  which  Bimetallism  will  cure  our 
trouble,  admits  of  no  (juestion.  While  Republi- 
cans are  ready  to  admit  that  Bimetallism,  if 
adopted  by  all  nations,  would  bring  back  pros- 
perity, they  are  not  willing  to  discuss  the  question 
upon  its  own  merits,  but  stick  firmly  to  the  in- 
ternational feature  of  it.  The  greait  majority  of 
Democrats  hold  that  silver  is  an  American 
money ;  that  our  fathers  regarded  it  as  a  stan- 
dard of  value;  and  that  it  stood  as  such,  and 
even  above  par,  until  it  was  treacherously  demon- 
etized in  i<S73.  This  act  they  claim  broke  down 
the  price  of  it  ;  and  in  the  same  ratio  as  its  price 
fell  by  other  nations  dropping  its  use,  the  more 


BIMETALLISM  AS   A    CURE.  1 29 

its  unused  bullion-value  suffered ;  while,  on  the 
other  hand,  gold,  being  sought  to  fill  the  place 
once  filled  by  silver,  had  now  nearly  double  the 
work  to  do  as  primary  money,  and  under  the  law 
of  supply  and  demand  began  to  rise  in  value  in 
ratio  to  increased  demand,  and  thus  under  the 
law  of  cause  and  effect  the  two  metals  gradually 
drew  apart.  This  view  is  also  generally  held  by 
Bimetallists  abroad ;  but  they  agree  that  since 
it  is  proven  by  Mr.  Sauerbeck's  tables  that  an 
ounce  of  silver  will  buy  approximately  as  much 
of  all  other  commodities  as  it  would  before  silver 
was  demonetized,  it  is  not  silver  which  has  de- 
preciated, but  gold  which  has  appreciated. 

The  view  of  the  financial  question  most  generally 
held  is,  however,  that  the  more  money  you  put  into 
circulation,  the  more  prices  will  advance.  Though 
the  free-silver  party  hold  to  this  general  view,  they 
are  nevertheless  losing  some  supporters,  who  for 
the  present  may  act  with  the  gold  men ;  but  the 
gold  men  must  not  take  any  encouragement  from 
this  added  strength  to  their  ranks,  because  it  is 
only  temporary,  and  arises  from  the  fact  that  these 
non-supporters  of  free-silver  coinage  have  found 
out  that  the  highest  authorities  are  almost  a  unit 
in  the  oi)ini()n  that  neither  gold  nor  silver  is  essen- 
tial in  supplying  a  nation  with  a  currency,  but 
claim  that  it  is  the  legal-tender  quality,  backed  by 
good  government  and  loeal/fi-inereasing  resources, 
which  gives  stability  to  currency.      Ilcncc    these 


I30  FALLING   PRICES. 

"  come-outers  "  are  opposed  to  either  metal,  and 
believe  in  paper  money ;  and  to  force  the  con- 
servative elements  in  the  Silver  party  to  take  an 
advance  step  in  currency  reform,  they  have  tem- 
porarily joined  the  Gold  forces,  —  thus  repeating 
the  action  of  the  old  Abolitionists,  who,  finding  the 
new  Republican  party  would  not  advocate  the 
abolition  of  slavery,  but  contented  itself  with 
opposing  its  extension  into  new  territories,  went 
over  in  a  body  to  the  Pro-slavery  party.  This 
temporary  accession  was,  however,  of  but  small 
solace  to  that  party.  It  may,  in  a  close  contest, 
have  given  them  one  more  administration,  but  it 
only  made  more  certain  their  doom  in  the  end. 

A  similar  dilemma  confronts  Mr.  Bryan  to-day. 
There  is  no  question  of  a  growing  sentiment  for 
Bimetallism  ;  but  Mr.  Bryan,  in  intimating  the 
need  of  a  policy  of  a  union  of  all  Silver  forces  in 
1900,  shows  his  keen  perception  in  forecasting 
political  events  by  forestalling  any  breaking  away 
of  these  advanced  minds.  These  radical  thinkers 
in  the  Silver  ranks,  however,  call  attention,  just  at 
this  time,  to  the  lesson  of  the  struggle  leading  up 
to  1 86 1.  It  was  the  Abolitionist  who  won  in  the 
end  in  that  struggle.  So  these  radical  thinkers 
say  to-day,  "  No  matter  by  whom  or  how  a  conflict 
begins  ;  the  important  matter  is  by  whom  and  how 
shall  it  end."  They  know  that  history  is  likely  to 
repeat  itself,  and  that  as  the  slaveholders  came  out 
with    their   system,    so  the  plutocrats   will    come 


BIMETALLISM  AS  A    CURE.  l^l 

out  with  their  bond  and  gold  system.  They  are 
to-day  pointing  to  the  fact  that  those  slaveholders 
lost  $4,000,000,000  of  slave-holdings ;  and  these 
prophets  are  throwing  out  dark  hints  as  to  what 
may  be  the  loss  of  the  unscrupulous  and  grasping 
bondholders,  when  the  wronged  and  robbed  peo- 
ple begin  to  settle  past  wrongs  and  sufferings. 
They  point  to  the  fact  that  in  Congress  to-day  the 
Gold  men  were  slow  to  take  steps  towards  helping 
bleeding  Cuba,  or  towards  resenting  any  insult 
from  Spain,  as  they  dreaded  any  disturbance  of 
the  security  of  their  colossal  holdings.  But  the 
Silver  men  were  more  patriotic  and  truly  conserva- 
tive, desiring  at  least  to  protect  their  nation's 
honor  ;  and  the  Populists,  who  are  advanced  Silver 
men,  desired  to  recognize  the  independence  of 
Cuba,  and  to  demand  satisfaction  for  the  destruc- 
tion of  the  battle-ship  Maine,  with  the  loss  of  two 
hundred  and  fifty  American  seamen.  In  contrast 
to  the  advanced  Silver  men  and  the  Populists,  we 
saw  the  cowardly  forms  of  the  bondholders  lurk- 
ing around  the  haunts  of  the  Gold  men  with  fear 
and  trembling,  forgetting  lionor,  country,  and 
humanity  in  their  eagerness  to  profit  by  some  new 
financial  deal  which  might  in  any  result  put  money 
in  their  pockets,  or  fearing  and  dreading  the  issue 
of  the  whole  matter  would  be  such  that  -  as  in 
the  case  of  the  slaveholders  in  1861  — not  only 
their  property,  but  their  lives  might  be  imperilled. 


CHAPTER    VIII. 


IMMIGRATION. 


Immigration  is  and  has  been  one  of  the  chief 
sources  of  our  population,  and  unciuestionably  it 
helps  to  build  up  any  nation  with  sufficient  terri- 
tory to  accommodate  it.  America,  surely,  is  the 
last  of  all  nations  which  should  complain  of  injury 
to  its  prosperity  coming  from  immigration,  for  had 
it  not  been  for  immigration  there  would  be  to-day 
no  American  people  outside  of  y\merican  Indians. 

Under  healthful  and  normal  conditions  one 
man  should  be  able  to  support  comfortably  five 
persons ;  but  to-day,  under  our  present  abnormal 
conditions,  there  are  many  thousands  of  men  in 
this  country  unable  to  support  themselves.  In 
inquiring  for  the  cause  of  this  astounding  fact,  we 
are  told  that  it  is  the  result  of  there  being  too 
many  people  in  the  country  for  the  amount  of 
work  to  be  done,  and  that  by  restricting  immigra- 
tion we  should  have  work  plentiful  enough  for  all. 
From  this  explanation  of  the  "hard  times"  one 
might  be  led  to  think  that  work  comes  from  some 
source  outside  of  human  beings.  What  such  a 
shallow  philosophy  really  implies  is  that  if  people 
would  come  over  here  and  not  do  any  work  at  all, 

^32 


IMMIGRA  TION.  1 3  3 

but  would  spend  money  and  give  work  to  those 
needing  it,  it  would  be  all  right.  But  this  would 
not  be  all  right,  for  it  would  be  adding  to  the  very 
trouble  from  which  our  people  are  now  suffering. 
The  present  lack  of  work  results  from  the  fact 
that  those  who  do  work  are  not  permitted,  under 
our  present  false  economic  system,  to  consume 
more  than  perhaps  one-tenth  of  what  they  produce, 
—  the  other  nine-tenths  being  consumed  by  those 
who  do  not  work,  but  make  their  money  work  for 
them.  Thus  nine  workers  and  producers  are  cut 
off  from  what  rightfully  belongs  to  them,  —  from 
the  three  prime  essentials  of  existence  ;  namely, 
food,  clothing,  and  shelter.  These  they  now  have, 
at  least,  in  insufficient  quantity  to  make  existence 
agreeable  to  them.  Many  single  groups  of  these 
nine  workers  and  producers  are  living  in  two  or 
three  rooms,  while  in  equity  they  are  entitled  to 
two  houses  of  five  rooms  each.  Many  of  them  go 
hungry  every  day,  when  they  should  have  all  they 
can  eat,  and  this  of  good  quality.  Many  of  them 
are  ill  clad  and  in  rags,  when  they  should  be  suit- 
ably clothed.  Who  can  gainsay  their  right  to 
have  all  these  things  }  He  who  works,  shall  he 
not  cat,  and  have  in  abundance  of  the  good  things 
of  life  }  In  the  name  of  justice,  who  is  entitled  to 
these  things,  it  not  the  worker  and  tlic  pKuIucci  ? 
When  wc  iiave  normal  societary  coiuHtions, 
under  which  a  man  receives  either  in  money  or  an 
equivalent     in     conmiodities    to    the    lull    amount 


134  FALLING   PRICES. 

equalling  his  daily  production,  and  this  consumed 
by  his  own  household,  then  we  shall  have  markets 
unglutted  with  goods  ;  and  those  who  do  not  work 
will  be  compelled  to  part  with  an  amount  of  money 
in  procuring  their  necessary  supplies  which  will 
be  sufficient,  when  paid  to  the  producer,  to  enable 
him  to  go  into  the  market  and  purchase  the  needed 
supplies  for  Jiis  family.  But  in  to-day's  abnormal 
and  brutal  social  conditions,  the  man  of  money 
goes  into  the  labor  market,  and  takes  the  lowest 
bid  of  the  man  who  is  most  desperate  in  circum- 
stances ;  and  these  conditions  have  prevailed  so 
long  that  there  are  always  sufficient  victims  of  the 
inhuman  system  to  keep  the  price  of  labor  down 
to  the  lowest ;  and  any  man  protesting  that  he 
has  a  large  family,  and  that  the  amount  offered 
would  only  support  himself,  leaving  the  remaining 
members  of  his  family  in  want,  becomes  a  laugh- 
ing-stock of  the  corporation's  agents  contracting 
for  labor. 

This  system,  however,  in  time  destroys  itself ; 
for  this  man's  family  of  non-consumers  deprives 
the  market  of  just  that  amount  of  purchase,  and 
an  accumulation  of  unsold  stock  is  the  result. 
The  jobber,  finding  accumulated  stocks,  stops  pur- 
chases ;  and  the  mills,  not  receiving  sufficient 
orders,  lay  off  their  help.  Then  comes  the  cry 
that  there  are  too  many  working-people  for  the 
work  to  be  done.  As  a  remedy  for  this,  we  are 
told    that    we    must    stop    immigration,    it    being 


IMMIGKA  TIOiY.  1 3  5 

argued  that  these  immigrants  add  to  the  aheady 
well-stocked  labor  market.  This  immigration  fal- 
lacy comes  from  seeing  only  the  fact  of  an  accumu- 
lation of  goods  in  the  warehouse,  and  overlooking 
the  fact  that  in  every  working-man's  home  there 
is  a  need  of  goods  to  the  point  of  actual  want ! 
If  the  immigration  theory  is  correct,  that  there  is 
no  need  for  more  labor,  then  every  home  should 
be  full,  and  there  should  be  a  surplus  of  goods  in 
that  home.  It  is,  however,  the  present  unjust 
and  false  monetary  system  which  makes  all  this 
trouble,  by  keeping  from  the  producers  a  just 
and  equitable  proportion  of  their  own  production. 
They  have  not  the  money  to  supply  their  actual 
wants,  and  thus  relieve  an  apparent  —  but  not, 
correctly  speaking  —  overstocked  market. 

For  years  the  cry  has  gone  out  from  the  cotton 
and  woollen  manufacturers  of  an  overstocked  mar- 
ket. In  proof  of  this,  a  statement  of  the  num- 
ber of  pieces  of  goods  on  hand  would  be  given  at 
a  stated  period,  and  the  number  of  jiicces  added 
since;  and  then  it  would  be  said  that  prices  as  a 
result  had  been  falling  below  the  j)r()lit  mark. 
Now  the  men  at  the  head  of  these  mills,  or  be- 
longing to  the  Arkwright  or  other  clubs,  in  meet- 
ing this  condition  of  market,  usually  advise  holding 
an  auction  sale,  hoping  through  a  cut  in  prices  to 
unload  their  surplus  stock.  I'Lven  a  novice  can 
see  at  a  glance  that  this  does  not  relieve  the  situ- 
ation, for  it  only  removes  the  goods  laithcr  from 


136  FALLIXG   PRICES. 

the  mills,  and  allows  them  to  accumulate  in  smaller 
hands  ;  but  they  cannot  be  consumed  until  the 
consumers  can  get  money  with  which  to  purchase 
them.  Of  course  this  does  not  help  the  mills, 
except  perhaps  to  give  them  the  ready  money  to 
pay  off  some  bills,  and  to  run  temporarily  to  re- 
plenish the  stock  sold  ;  but  here  comes  the  end. 
They  cannot  do  this  a  second  time,  as  those  who 
have  last  bought  are  choked  up  with  goods  ;  hence 
the  mills  are  compelled  to  shut  down  entirely,  or 
greatly  to  lessen  the  output.  The  intelligence  of 
these  men  never  goes  beyond  the  market  needs, 
as  reflected  by  some  one  being  ready  to  buy ;  but 
they  are  always  prepared,  when  they  cannot  sell, 
to  state  that  the  market  is  overstocked,  and  drop 
the  matter  there.  No  intelligent  examination  as 
to  the  cause  of  the  glut  of  the  market  has  yet 
been  made,  in  order  to  see  if  the  people's  wants 
and  needs  have  been  supplied  to  a  point  of  surfeit, 
or  whether  just  the  speculative  market  alone  has 
been  filled  up.  The  most  that  has  been  done  is 
to  visit  other  sections  of  the  country,  not  for  the 
purpose  of  ascertaining  intelligently  if  the  families 
of  the  nation  have  an  oversupply  of  material  for 
sheets,  pillow-cases,  and  clothing,  but  to  find  out 
clandestinely,  perhaps,  the  cost  of  manufacturing 
in  these  sections,  so  as  to  undersell  and  steal  away 
their  trade.  Never  to  my  knowledge  have  these 
men  tried  to  discover  some  law  by  which  to  reach 
a  market  which  three  times  the  present  number  of 


IMMIGRA  TION.  137 

mills  could  not  supply  so  far  as  actual  needs  are 
concerned. 

What  is  true  of  this  branch  of  industry,  in  this 
regard,  is  also  true  of  all  other  branches  of  pro- 
ductive enterprise.  The  men  at  the  head  of  all 
these  vast  trusts  and  syndicates  know  full  well 
why  output  has  been  stopped,  —  not  because 
there  is  not  want  for  these  goods,  and  want  bor- 
dering on  suffering,  from  one  end  of  this  land  to 
the  other ;  but  because  by  curtailing  output  they 
can  maintain  profits,  without  any  reference  to  sup- 
plying the  wants  of  the  masses. 

It  is  this  stoppage  of  output  of  the  coal  and 
iron  mines  to  force  profits  ;  this  stoppage  of  mills 
to  reduce  stocks  on  hand,  — and  this  when  people 
all  over  the  land  need  coal  and  all  other  commodi- 
ties, —  it  is  this  which  has  forced  the  masses  into 
idleness,  and  put  them  farther  away  than  ever 
from  the  possibility  of  purchasing,  and  made  them 
willing  in  their  want  and  helplessness  to  turn 
against  the  innocent  immigrant,  thinking  that  less 
pe()])le  means  more  work  instead  of  less  work. 
Think  wl  men  once  mining  copper  at  50  cents,  and 
since  selling  it  at  10  cents;  cotton  at  47  1-2 
and  50  cents,  and  since  selling  it  at  4  3-4  cents  ; 
beeves  at  16  cents,  and  since  selling  it  at  31-2 
cents;  wheat  at  $2.50,  and  since  selling  it  at  40 
cents !  What  purchasing  jiower  do  these  low 
prices  leave  in  the  hands  of  the  family  to  buy 
back  cotton  cloth,  and  nlicvc  the  clogged  markets 


138  FALLING   PRICES. 

closed  by  the  mills?  Alas!  the  people  sleep  on 
straw  and  cornstalk  in  their  poverty,  having  had 
all  the  value  legislated  out  of  their  products  in  the 
interest  of  foreign  nations,  who  arc  now  receiving 
our  products  for  thirty  cents  on  the  dollar  of  their 
actual  value. 

If  a  party  ever  gets  into  power  in  this  nation  in 
the  interest  of  the  producers,  in  the  interest  of  the 
working-people,  and  restores  honest  value  to  them, 
—  giving  the  honest  products  raised  by  honest 
men  the  same  purchasing  power  now  given  to  the 
money  paid  to  the  non-taxable  bondholders  of 
the  world, — then  our  cotton  and  woollen  mills 
can  run  night  and  day,  and  the  people  that  work 
in  them  will  become  customers,  and  consume  their 
own  products.  The  non-taxable  bondholder  will 
then  be  compelled  to  pay  a  living  price  to  labor ; 
and  all  strife  and  contention  about  immigration  or 
imported  labor  being  the  cause  of  our  hard  times 
will  be  forgotten,  and  present  conflicts  over  the 
cause  of  our  want  and  suffering  will  be  supplanted 
by  peace  and  plenty. 


CHAPTER  IX. 

TRUSTS  AND  DEPARTMENT  STORES  AS  A  CAUSE. 

Many  able  men  to-day  believe  that  the  Trusts, 
or  their  counterparts,  the  syndicates  and  combines, 
are  the  cause  of  our  nation's  present  financial  and 
commercial  distress.  They  claim  that  these  mon- 
sters of  organized  capital  reach  out  their  tentacles 
and  fasten  upon  all  the  commodities  and  necessi- 
ties of  life,  and  squeeze  all  the  small  holders  to 
death,  unless  they  surrender  and  become  contribu- 
tors to  the  support  of  these  monsters.  It  is  also 
claimed  that  they  control  the  volume  of  business 
with  the  design  to  lessen  output ;  to  force  the 
largest  possible  profits  on  the  smallest  possible 
amount  of  business.  This  selfish  policy  of  the 
Trusts,  it  is  claimed,  works  ruin  to  the  small  mer- 
chant, by  depriving  him  in  the  end  of  his  business, 
—  and  this  at  a  time  of  life,  usually,  when  he  is 
unfitted  to  begin  anew  in  anything  else,  even  if 
everything  else  in  business  lines  had  not  already 
been  overdone.  Thousands  of  once  active  and  en- 
ergetic small  business  men,  so  to  speak,  who  in 
times  gone  by  made  up  the  bulk  of  the  business 
community,  are  to-day  not  only  no  longer  a  help 
to  business,  but  have  become  so  reduced  as  to  be 
'39 


140  FALLING   PRICES. 

an  incumbrance  upon  it,  —  resulting  in  their  small 
jobbing  stores,  as  well  as  their  once  comfortable 
and  well-furnished  private  residences,  being  thrown 
on  the  market,  thus  breaking  down  the  rents  of 
both,  and  forcing  down  the  value  of  real  estate. 

Again,  these  Trusts,  it  is  said,  control  prices  of 
all  the  commodities  and  necessities  of  life.  They 
also  dictate  the  price  to  be  paid  to  the  producers, 
as  well  as  that  to  be  charged  to  the  consumers. 
They  are  masters  of  the  situation  at  both  ends  of 
the  bargain.  Through  low  prices  forced  upon  the 
producer,  he  is  placed  where  he  is  no  longer  a 
consumer ;  hence  trade  suffers  to  the  extent  of 
the  additional  loss  of  his  trade.  The  consumer  to 
whom  the  Trust  sells,  from  being  charged  double 
the  price,  is  no  longer  a  consumer  of  more  than 
one-half  the  former  amount  of  goods  ;  and  hence 
an  accumulation  of  stock  in  the  Trust's  hands. 
This  glutting  of  the  market  must,  of  course,  be 
met  by  some  action  on  the  part  of  the  Trust,  and 
it  immediately  proceeds  to  curtail  the  output ;  this 
in  time  only  aggravates  the  trouble  still  further, 
by  depriving  the  discharged  laborers  of  purchasing 
power  by  cutting  off  or  reducing  their  wages. 
Thus  the  disease  works  its  way  into  the  very 
vitals  of  trade,  until  all  life  and  energy  have  gone 
out  of  it,  and  stagnation  and  decay  set  in. 

This  is  the  usual  and  common  story  of  the  men 
who  have  been  hurt  by  the  Trust.  Rut  in  seeking 
for  the  cause  of  their  trouble  they  are  like  the 


I'HUSTS  AND   DEPARTMENr  STORES.       I4I 

blind  man,  who,  being  led  up  to  the  foreleg  of  a 
large  elephant  and  asked  to  describe  what  to  him 
the  elephant  looked  like,  after  feeling  all  around 
the  limb,  said  he  thought  it  must  look  like  the 
trunk  of  a  tree.  These  men  do  not  see  the  whole 
trouble  any  more  than  the  blind  man  saw  the 
whole  elephant,  and  do  not  know  that  they  are 
only  dealing  with  a  result  and  not  with  the  cause. 
Something  caused  the  Trust  to  form  ;  and  that 
something  was  prices  falling  so  low  that  jirofits 
disappeared,  and  to  protect  the  profits  these 
Trusts  were  formed. 

These  Trusts  were  not  formed  for  the  benefit 
of  those  outside,  but  to  protect  the  Trusts  them- 
selves from  falling  prices ;  and  thus  far  they  have 
been  able  to  do  it.  The  Trusts,  like  the  Banks, 
keep  the  price  of  their  commodities  up,  while 
everything  else  in  the  hands  of  the  jieople  is  con- 
stantly shrinking  in  value.  Thus  it  will  be  seen 
that  while  everything  has  a  cause,  that  cause  may 
not  be  a  first  cause ;  and  in  the  case  of  the  Trust 
it  will  be  seen  that  while  falling  prices  caused  the 
Trust  to  be  formed,  there  was  something  behind 
that  which  caused  the  prices  themselves  to  fall. 
This  brings  us  back  to  the  main  argument  of  the 
book,  which  has  been  previously  presented  on 
page  51. 

One  can  readily  see,  then,  how  all  these  results, 
in  the  form  of  unnatural,  perverted,  and  artificial 
monstrosities  called  Trusts,  are  so   readily  seized 


142  FALLING  PRICES. 

upon  as  being  the  cause  instead  of  the  effect  of 
trouble,  by  men  who  have  not  had  the  time  to  trace 
back  from  effect  to  cause,  or  from  cause  to  effect. 
If  every  business  man  would  give  a  little  time  to 
studying  the  masters  in  finance,  instead  of  jump- 
ing so  readily  to  a  conclusion  as  to  the  cause  of 
our  financial  and  commercial  troubles,  —  like  the 
man  who  is  ready  to  fight  the  man  back  of  him 
for  treading  upon  his  heels,  while  that  man  back 
of  him  is  fighting  a  crowd  of  men  pressing  him  on, 
—  he  would  soon  ascertain  the  first  cause  of  those 
troubles,  and,  by  acting  in  unison  with  all  those 
having  interests  in  common,  the  correct  remedy 
might  speedily  be  found  and  applied,  and  we 
should  soon  have  higher  prices  and  national  pros- 
perity. 

While  the  wholesaler  and  jobber  are  attributing 
all  our  trouble  and  depression  to  Trusts,  the  re- 
tailers throughout  the  land  are  fiercely  assailing 
the  department  stores  as  being  the  great  cause. 
In  Chicago  a  formidable  movement  has  been 
made  to  tax  the  department  store  out  of  exist- 
ence. But  here,  again,  a  secondary  rather  than 
a  primary  cause  has  been  seized  ujoon.  Compared 
with  the  Trust,  so  far  as  the  people  are  concerned, 
the  department  store  is  a  real  blessing.  It  serves 
the  public  needs,  without  doing  the  public  as  a 
whole  an  injury,  as  is  the  case  with  the  Trust. 
The  public  can  exercise  a  choice  in  dealing  with 
a  department  store,  but  not  so  with  a  Trust ;  for 


TRL^STS  A. YD   DEPARTMENT  STORES.       1 43 

the  latter  controls  certain  necessities  of  the  whole 
nation,  and  thus  compels  the  people  to  buy  of  it 
alone,  since  they  cannot  do  without  necessities. 

Commercially  considered,  however,  the  depart- 
ment store  is  a  detriment  ;  for  while  the  practice 
of  concentrating  every  variety  of  goods  under  one 
roof  is  convenient  to  the  people,  the  practice  car- 
ries with  it  a  power  of  centralizing  capital  which, 
m  the  end,  is  used  against  its  very  patrons  in 
their  occupations.  It  is  a  well-established  fact 
that  the  department  store  has  been  made  a  suc- 
cess through  its  bargain-counters,  so  far  as  at- 
tracting trade  is  concerned  ;  but  it  is  a  question 
if  this  will  not  in  time  work  its  own  destruction, 
unless  (which  is  more  probable)  an  understanding 
and  agreement  through  combination  does  not  in- 
terfere to  regulate  this.  The  bargain-counter 
principle  in  the  department  store  undermines 
not  only  a  living  profit  for  all  other  stores, 
but  it  breaks  down  the  general  market  price  of 
goods  in  the  factories  and  mills,  forcing  them 
to  reduce  labor  in  order  to  meet  this  slaughter 
caused  l)y  the  bargain-counter. 

It  is  the  abuse  of  the  original  bargain-counter 
idea,  however,  which  is  now  working  an  injury  to 
trade.  Buying  "job  lots  "  at  the  mills  or  at  sher- 
iff's sales,  and  advertising  special  days,  or  even 
special  hours  during  a  day,  and  selling  an  article 
for  one-half  its  retail  i)rice,  charging  the  loss  in 
with    the    cost    of    the    advertising   account,    is   a 


144  FALLING  r KICKS. 

practice  which  is  rapidly  developing  in  the  depart- 
ment store  system,  forced  upon  it  by  the  sharp 
competition  which  works  such  injury  to  trade  in 
general.  This  system,  in  time,  means  the  anni- 
hilation of  the  small  stores  in  special  lines. 
Nine-tenths  of  these  stores  go  down  from  loss 
on  old  stock,  which  has  been  accumulating  more 
and  more  rapidly  since  the  advent  of  the  depart- 
ment store,  and  for  which  there  is  no  remedy. 
But  the  cost  of  selling  is  the  test  of  the  two 
systems.  A  seven  dollars  per  week  salesman  in 
a  department  store  will  sell  double  the  average 
amount  taken  by  most  stores,  in  single  lines ; 
and  in  these  latter  stores  running  expenses  are 
double  those  of  the  department  store,  relative 
to  amount  of  sales.  This  uneven  contest  means 
the  extinction  of  the  single-line  store.  This  takes 
away  another  opportunity  in  the  commercial  field, 
and  the  once  small-store  proprietor  now  becomes 
a  seven-dollar  man  behind  the  counter  of  the 
department  store. 

Ikit  while  all  this  works  greater  and  greater 
hardships  upon  the  people  under  falling  prices, 
and  intensifies  the  general  business  depression, 
it  must  not  be  considered  as  the  cause  of  falling 
prices,  when  it  is  only  one  of  their  many  results. 


CHAPTER  X. 


OVERPRODUCTION. 


Among  the  many  theories,  hobbies,  and  fads 
put  forth  by  writers  and  speakers  to  account  for 
the  cause  of  the  fall  in  prices  and  depression  in 
business,  perhaps  the  one  niost  harj^ed  uj)on  of 
all  others  is  that  of  "overproduction."  While 
I  have  by  no  means  ignored  this  in  my  general 
argument  hitherto,  its  importance  requires  that  I 
devote  to  its  consideration  a  special,  though  short, 
chapter. 

To  show  the  hollowness  of  this  popular  delu- 
sion, put  ff^rth  by  banker,  editor,  pastor,  and 
politician,  it  will  only  be  necessary  to  recall  the 
fact  that  in  i860,  when  nearly  as  great  a  per- 
centage of  our  laborers  were  out  of  em])loyment 
as  in  i<S93,  the  popular  cry  of  "  oxerproduction  " 
was  heard  above  all  others;  and  in  1861  this 
condition  was  intensified  by  the  breaking  out  of 
the  war.  Here  again  we  find  no  money  in  cir- 
culation ;  "  shin  -  plasters  "  ;md  postage  stamjis 
were  all  the  people  had  uitli  which  to  make 
exchanges.  No  one  would  tom  h  a  bank-bill,  as 
all  the  banks  and  the  government  itself  had 
'45 


146  FALLING   PRICES. 

suspended  specie  payments.  It  was  a  complete 
paralysis  of  trade.  And  yet  while  every  one  was 
in  want,  and  producers  and  manufacturers  could 
not  sell  a  dollar's  worth,  the  old  cry  of  "over- 
production "  was  set  up  for  the  thousandth  time. 
But  in  less  than  a  year  every  mill,  every  mine  and 
furnace,  was  running  night  and  day ;  the  work- 
houses and  jails,  the  highways  and  byways,  were 
scoured  for  men  of  every  kind,  and  farmers  were 
scolding  the  manufacturers  for  having  stolen  their 
help.  Prices  were  advancing  all  along  the  line. 
Foreigners  came  over  here  in  swarms,  leaving 
nations  with  one  hundred  per  cent.  "  honest " 
dollars,  and  giving  preference  to  "  thirty-eight  " 
per  cent,  "dishonest"  paper  dollars.  Yet  men 
enough  could  not  be  found  to  do  the  work  de- 
manded, though  those  employed  were  worked 
night  and  day ;  and  there  were  no  goods  to  be 
found  in  the  markets,  and  as  a  consequence  prices 
kept  advancing.  Any  man  in  the  dry  goods 
business  at  that  time  knows  that  cotton  cloth 
advanced  from  five  cents  a  yard  to  seventy-five 
cents  in  three  years'  time ;  and  still  goods  were 
scarce,  though  only  a  few  years  previous  we 
were  told  there  were  too  many  goods  ! 

Now,  every  one  knows  that  these  "good  times" 
continued  until  1873,  when  something  happened. 
That  something  was  the  contraction  of  the  cur- 
rency, followed  by  a  panic  and  "hard  times,"  from 
which  we  have  not  yet  recovered.     The  mills  and 


O  VERPROD  UC  TJOX.  1 47 

mines  were  closed,  and  this  while  they  were  full 
of  orders.  The  help  was  discharged,  as  the  banks 
could  not  furnish  money  for  pay-rolls  ;  trade  fell 
off,  as  the  people  could  not  buy  for  the  need  of 
money.  Is  it  not  evident,  then,  that  not  an  over- 
supply  of  food  in  the  midst  of  want  and  hunger, 
not  an  oversupply  of  clothing  when  people  are  in 
rags,  but  an  undersupply  of  money,  is  the  primary 
cause  of  our  business  depression  .-' 

There  is  never  overproduction  in  the  great 
cities  during  national  campaigns  on  the  night 
of  election.  Market-baskets  and  bundles  testify 
to  the  return  of  prosperity  in  an  hour's  time 
after  the  polls  close.  But  it  only  lasts  about 
an  hour,  and  does  not  return  until  another  four 
years  come  around,  when  the  same  causes  pro- 
duce the  same  effects.  Take  away  a  nation's 
money,  and  you  will  have  overproduction  of 
good.s,  with  want  and  suffering.  We  never  have 
a  so-called  overproduction  of  goods  when  we  do 
not  at  the  same  time  have  want  and  suffering 
for  those  very  goods.  The  people  being  stripped 
of  their  money  are  deprived  of  the  necessities  of 
life.  Not  an  overproduction  of  goods,  but  an 
undersupply  of  money  is  the  trouble.  One  will 
always  hear  the  general  complaint  that  money  is 
scarce  just  before  hearing  of  an  overprodutiion. 
CJverproduction,  then,  put  forth  as  a  cause  of 
hard  times,  is  simi)ly  pulling  the  cart  before  the 
horse. 


CHAPTER  XI. 

HARD    TIMES    THE    EFEECT    OF    "IMPROVED 
MACHINERY." 

While  the  press,  pulpit,  banker,  and  politician 
are  clamoring  about  "overproduction"  being  the 
cause  of  our  nation's  decay,  the  trades  and  work- 
ing-classes are  crying  out  against  improved  ma- 
chinery as  being  responsible  for  the  disaster  which 
has  come  upon  our  nation. 

As  the  overworked  and  jaded  street-car  horses 
used  to  fall  under  their  loads  in  the  sun's  torrid 
rays,  an  expression  of  sympathy  usually  went  up 
from  the  bystanders,  and  the  advent  of  steam  or 
electricity  was  invoked  to  relieve  these  suffering 
dumb  servants  of  man  ;  societies  for  the  preven- 
tion of  cruelty  to  animals  were  organized  to 
protest  against  overwork  and  underfeeding,  and 
to  secure  humane  treatment  especially  for  every 
animal  in  the  service  of  man.  But  how  about 
man  himself  .-*  Is  he  not  more  valuable  than  the 
beasts  that  perish  ?  Shall  we  deny  to  him  pro- 
tection from  overwork  and  ill  fare  ?  Improved 
machinery,  if  rightly  applied,  will  bless  and  not 
curse  mankind. 


HARD    TIMES.  1 49 

Now,  of  course,  there  is  some  real  grievance 
back  of  this  feeling  among  the  people  against 
improved  machinery.  Let  us  see  if  we  can  find 
out  what  and  why  it  is. 

Under  the  conditions  produced  by  our  present 
financial  system,  which  has  brought  about  low 
prices  and  sharp  competition,  manufacturers  are 
driven  to  every  device  to  undersell  one  another  in 
the  market ;  and  they  have  seized  upon  improved 
machinery  as  one  of  the  means  at  hand  for  pro- 
tecting their  own  interests.  Every  new  machine 
invented  is  used  to  underwork  human  labor,  and 
so  to  supplant  it.  Therefore,  the  more  machines 
there  are  introduced  into  the  mills  and  shops, 
the  less  of  hand-labor  there  is  required,  and  the 
lower  are  the  wages  paid  to  the  laborers  still  cm- 
ployed.  All  the  improved  machinery  is  thus  oper- 
ated, not  to  lessen,  but  to  increase,  the  burden 
of  the  wage-earner  ;  it  is  operated  in  the  interest  of 
the  manufacturers,  of  the  rich  slockholdcis  in  tlie 
mills  and  factf)rics.  And  wliy  not.-*  Human  na- 
ture is  selfish,  we  all  say  ;  and  when  that  natural 
selfishness  is  stimulated  and  tempted  by  false  and 
brutal  financial  systems,  which  force  down  ])rices 
and  compel  fierce  competition,  how  can  we  expect 
otherwise  than  that  those  who  have  the  power  in 
their  hands  —  and  coniljincd  cajiital  always  holds 
that  power  over  ill-organized  and  unintelligent 
labor  —  will  use  it  for  their  own  benefit  rather 
than  for  the  welfare  (tf  suffering  humanity.''     This 


150  FALLING  PRICES. 

is  the  day,  and  at  }Mcscnt  this  is  the  opportunity, 
of  the  rich,  ■ —  of  those  who  work  not  with  their 
hands,  but  with  their  bonds  and  their  stocks.  And 
the  law-makers  of  the  present  time  are  their  paid 
allies,  forging  and  supplying  them  with  the  weap- 
ons—  the  so-called  laws  and  enactments  of 
Legislatures  and  Congress  —  whereby  they  can 
protect  their  own  interests  against  the  larger  and 
more  inclusive  interests  of  the  whole  people.  Pri- 
vate ownership,  private  gain,  not  public  welfare, 
holds  the  upper  hand,  and  misuses  every  means  to 
enrich  the  few  and  impoverish  the  many. 

Thus,  while  the  improved  machine  does  the 
needed  work  cheaper,  better,  and  quicker  —  as  it 
was  intended  to  do  —  than  mere  hand-labor  can 
do  it,  the  difference  in  gain  does  not  go  to  the 
people.  It  goes  to  the  owner  of  the  machine ; 
and  this  difference  in  gain  to  the  machine  owner 
is  in  exact  ratio  to  the  number  of  men  displaced 
by  the  use  of  the  machine.  This  is  in  accordance 
wuth  the  immoral  law  of  profit  at  the  expense  of 
human  welfare.  This  law  will  not  always  stand, 
any  more  than  did  the  slave-laws ;  but  it  will  last 
as  long  as  the  present  money  system  lasts,  which 
caused  the  fall  in  prices. 

To  show  that  machinery  is  not  wholly  responsi- 
ble for  the  great  change  which  has  come  over  the 
country,  it  is  only  necessary  to  say  that  the  manu- 
facturers, merchants,  and  farmers  suffer  alike,  in 
the  end,  with  the  operative  ;  while  if   machinery 


HARD    TIMES.  I  5  I 

alone  were  the  cause,  the  operative  alone  would  be 
the  sufferer.  The  manufacturers  suffer  by  pro- 
ducing with  their  improved  machinery  more  than 
the  working-people,  without  wages  and  without 
money,  can  consume ;  and  in  the  end  their  mills 
have  to  shut  down,  and  their  machines  stand  idle. 
The  merchants  suffer  by  having  stores  full  of 
goods  which  they  cannot  sell  without  ruinous  cost 
to  themselves,  because  the  unemployed  and  money- 
less people  cannot  buy  even  at  low  prices.  The 
farmers  suffer,  because  the  working-people  who 
need  their  produce  cannot  purchase  it  without 
work  and  its  consequent  wages.  The  rich  alone 
do  not  experience  suffering,  because  they  have 
accumulated  wealth,  and  are  independent  of  labor. 
No;  "improved  machinery"  is  not  the  cause, 
but  the  result  of  the  hard  times.  When  times  be- 
come good,  under  natural  conditions,  —  conditions 
in  which  man  will  exchange  services  with  man  on 
equitable  terms,  —  then  every  man  will  welcome 
the  advent  of  machinery  in  order  to  lessen  his 
hours  of  toil  ;  permitting,  as  it  will,  of  greater  op- 
portunity for  his  recreation  and  self-improvement. 


CHAPTER  XII. 


CONFIDENCE. 


The  term  "confidence"  is  more  frequently 
used  during  financial  disaster  than  during  com- 
mercial and  trade  depression.  It  is  not  unusual 
to  have  financial  panics  without  disturbance  to 
commerce.  When  such  panics  are  on,  the  first 
cry  finding  general  expression  is  that  "  confidence 
will  soon  be  restored,  and  then  everything  will  be 
all  right."  There  is  never  much  knowledge  at 
hand  regarding  the  street's  financial  trouble,  or 
why  the  banks  are  involved.  The  press  tries  to 
control  the  situation  by  giving  assurance  that 
"confidence  will  soon  be  restored,"  and  that 
"  everything  will  be  running  smoothly  in  a  few 
days." 

Such  panics  are  like  scandals  and  divorce  cases 
in  high  life,  which  are  usually  settled  without 
allowing  the  public  to  know  much  about  the 
details  of  the  case.  Finance  has  always  been  held 
above  the  concern  of  the  people,  just  as  the  old 
way  of  doing  mercantile  business  was  before  the 
war.  The  common  people,  the  working-people, 
were  never  supposed  to  know  anything  concerning 
the  cost  to  or  the  profit  made  by  those  who  were 

152 


CONFIDE  A  'CE.  1 5  3 

manufacturing,  buying,  and  selling  goods.  The 
dear  j)eople  were  presumed  to  have  "  confidence  " 
in  the  integrity  of  merchants  in  those  days,  taking 
it  for  granted  that  the  firms  paid  all  they  could  for 
labor,  and  sold  as  cheaply  as  was  possible. 

It  was  not  until  the  manufacturers  applied  to 
the  government  for  financial  assistance  in  the 
matter  of  a  tariff  that  the  people  became  informed 
upon  the  cost  and  profit  of  all  kinds  of  manufac- 
tured goods  ;  and  from  this  one  cause,  more  than 
from  any  other,  came  the  great  strikes  of  to-day. 
Now  the  leaders  of  labor  organizations  can  give 
closer  figures  upon  cost  of  production  and  trans- 
portation of  goods  than  those  who  have  made 
investments  in  such  goods.  This  same  observa- 
tion holds  in  regard  to  banking.  The  people  for- 
merly did  not  know  anything  about  banking  or  the 
principle  of  money, — about  its  origin,  volume, 
material,  or  under  whose  control  it  was.  It  was 
not  until  the  bankers  in  their  turn  applied  to  the 
government,  and  asked  for  a  royalty  upon  their 
transactions,  that  the  people  became  informed 
up(tn  the  (jucstion  of  finance;  and  to-day  there 
are  more  books  and  documents  upon  this  subject 
than  upon  any  other.  The  people  now  understand 
the  financial  question  comparatively  well,  for  it 
has  been  thoroughly  discussed  in  all  political  cam- 
paigns for  the  past  twenty  years  ;  and  things  haxe 
been  so  changed  that  "confidence"  has  become 
an  obsolete  expression,   and   of   late  has   not    had 


154  FALLING   PRICES. 

any  appreciable  influence  in  affecting  the  public 
mind.  Ignorance  and  confidence  may  be  fitly 
called  twin  sisters.  To-day,  all  alive,  up-to-date 
business  men  want  to  understand  cause  and 
effect ;  and  now  when  any  serious  trouble  affects 
the  business  community,  they  cannot  —  as  they 
could  twenty  years  ago — be  hushed  and  com- 
forted with  the  old  cry,  "  Have  confidence  !  have 
confidence !  and  all  will  be  well."  No ;  the  peo- 
ple are  becoming  intelligent,  and  will  demand  that 
definite  laws  be  passed  to  promote  the  interests  of 
the  business  community  and  the  people,  instead 
of  those  of  the  few  ;  and  while  they  may  be  baf- 
fled or  put  off  for  a  little  time  longer  by  their  law- 
makers, the  hour  will  come  when  the  people  will 
peremptorily  insist  upon  a  new  order  of  things, 
and  then  the  old  cry  of  "Have  confidence"  will 
cause  only  a  smile  of  derision. 


CHAPTER    XIII. 

SUPPLY    AND    DEMAND. 

The  phrase  "supply  and  demand"  is  in  all 
probability  used  with  greater  frequency  in  discuss- 
ing questions  regarding  the  regulation  of  business 
conditions  and  the  rise  and  fall  in  prices  than  any 
other,  especially  by  men  who  have  not  made  a 
thorough  and  scientific  study  of  economics.  It 
will  be  observed,  however,  that  this  phrase  is 
more  commonly  used  in  the  marts  of  commerce 
and  trade  than  in  agricultural  districts,  and  the 
reason  is  obvious.  The  merchant  has  observed, 
during  his  years  of  business  experience,  that  a 
scarcity  of  goods  causes  an  advance  in  the  price, 
while  an  overabundance  of  goods  causes  a  drop  in 
the  price  ;  in  other  words,  that  when  there  is  an 
eager  demand  for  goods  the  price  advances,  while 
when  buyers  are  coy  and  the  market  plethoric 
prices  soften. 

While  merchants  arc  usually  what  we  call  "hard- 
headed  "  men,  sharp,  positive,  intense,  and  practi- 
cal, they  arc  not  as  a  rule  philosophers  ;  that  is, 
they  judge  of  the  operation  of  cause  and  effect 
from  their  day-to-day  narrow  experience.  They 
do  not  take  a  broad  outlook  upon  the  dilfcrcnt 
'55 


156  FALLING   PKICES. 

periods  of  their  nation's  history, — periods  when 
prices  were  constantly  rising,  and  other  periods 
when  they  were  as  constantly  falling,  —  and  study 
the  law  of  cause  and  effect  as  it  operates  in  this 
larger  arena  of  activity,  and  try  to  find  tho.  primal 
reason  why  prices  at  one  time  rise,  and  why  at 
another  time  they  fall.  It  is  sufficient  for  them 
to  know  that,  in  their  narrow  sphere,  when  goods 
are  scarce  prices  rise,  and  when  they  are  plentiful 
prices  fall.  When  a  buyer  asks  a  seller,  "  How  is 
trade  to-day.''"  and  the  seller  replies,  "  First-rate! 
Our  only  trouble  is  to  get  the  goods  ;  prices  are 
advancing  all  the  time,  and  you  would  do  well  to 
book  your  order  before  they  go  higher,"  he  is 
applying  the  law  of  supply  and  demand  to  the 
small  range  of  his  own  personal  affairs.  From 
his  limited  point  of  view  he  is  indeed  right  in  his 
diagnosis  ;  but  from  the  standpoint  of  the  political 
economist,  —  the  man  who  is  called  upon  to  advise 
a  young  and  free  nation  what  kind  of  a  financial 
system  it  must  adopt  in  order  to  cope  successfully 
with  old  and  established  and  plutocratic  countries, 
—  he  is  far  from  being  right,  and  needs  to  enlarge 
and  broaden  his  views  to  meet  national  and  inter- 
national requirements. 

Now,  let  a  professor  in  political  economy  ask 
this  merchant  why  it  is  that  prices  are  from  one 
thousand  to  five  thousand  per  cent,  higher  in  this 
country  than  they  are  in  China  ;  or  why  prices  are 
fifty  per  cent,  lower  in  Canada  than  in  the  United 


SUPPLY  AND   DEMAND.  15/ 

States  ;  or  why  it  is  that  prices  are  one  hundred 
per  cent,  higher  in  Mexico  than  in  the  United 
States,  —  and  he  will  see  that  this  will  put  his 
"  supply  and  demand  "  theory  to  the  test  at  once. 
Could  he  cite  or  explain  the  laws  and  systems 
which  produce  this  discrepancy  in  prices .-'  Cer- 
tainly it  cannot  be  ordinary  supply  and  demand 
which  makes  wheat  one  hundred  per  cent,  higher 
on  one  side  of  the  Mexican  line  than  it  is  upon 
the  other  ;  for  in  that  case  wheat  would  go  right 
over  the  line.  By  this  it  can  easily  be  seen  that 
supply  and  demand  do  not  regulate  prices  in  a 
national  or  international  sense.  So  far  as  a  short 
crop  of  ai)plcs  or  a  large  crop  in  New  England  is 
concerned,  it  docs  ;  and  while  the  price  may  go  up 
in  regard  to  apples,  it  may  at  the  same  time  go 
down  in  regard  to  potatoes,  under  the  influence  of 
a  big  crop.  But  what  was  the  cause  of  prices  of 
all  commodities  —  of  land,  of  railroads,  of  labor, 
of  everything  except  United  States  bonds  and 
other  similar  securities  —  experiencing  a  fall  in 
value  from  1S65  until  to-day,  and  still  continuing 
to  fall  ?  Will  the  answer  of  supply  and  demand 
meet  this  case .''  Again,  what  caused  prices  of 
everything  except  United  States  bonds  constantly 
to  rise  from  1862  until  i<S65  ?  Why  should  a 
house  that  cost  $5,00O  in  1X65  fall  Hfty  per  cent, 
in  ten  years,  and  a  jf>5,000  United  States  bond  rise 
one  hundred  per  cent,  during  the  .same  time.-' 
When  asked  the  cau.se  of  the  fall  of  prices  for  the 


158  FALLING   PRICES. 

past  thirty  years,  does  the  answer  of  supply  and 
demand  meet  the  point  ?  Certainly  not,  in  the 
sense  in  which  the  merchant  uses  it  in  regard  to 
supply  and  demand  of  goods. 

There  is,  however,  a  way  in  which  the  law  of 
supply  and  demand  can  be  applied  in  accounting 
for  the  rise  and  fall  in  values ;  and  that  is  in 
the  demand  and  supply  of  money,  —  not  between 
money-lenders  and  the  people,  but  between  the 
relative  amount  of  the  nation's  currency  circula- 
tion and  the  property  oi  the  nation.  To  curtail, 
or  contract,  the  nation's  volume  of  money,  and 
thus  make  it  scarce,  will  have  the  same  effect 
upon  its  price  as  upon  that  of  the  short  crop  of 
potatoes  ;  it  will  become  dear.  Just  here  is  the 
mistake  which  the  average  business  man  makes. 
He  cannot  see  that  the  dollars  as  well  as  the 
potatoes  can  go  up  in  price.  To  his  mind  every- 
thing else  can  go  up  or  down,  but  dollars  must 
ever  remain  the  same !  If  he  is  compelled  to  give 
eighty  cents  for  a  bushel  of  potatoes,  one  hundred 
per  cent,  rise  over  last  year's  price,  he  explains  it 
by  saying  that  potatoes  are  scarce,  and  the  price  of 
them  has  gone  up.  Suppose  now  that  he  goes  out 
to  buy  ;^2,ooo.  All  he  has  to  buy  this  money  with 
is  a  house.  Ten  years  ago  he  gave  $4,000  for  his 
house,  and  since  this  house  has  maintained  its 
relative  value  to  all  surrounding  properties,  he 
expects  now  to  get  $4,000  for  it.  But  he  finds 
the  price  of  money  has  gone  up,   like  the  pota- 


SUPPLY  A\D   DEMAND.  I  59 

toes,  one  hundred  per  cent.  ;  and  so  instead  of 
giving  $2,000  worth  of  the  $4,000  house  for  the 
money  he  wants,  he  is  compelled  to  give  $4,000 
worth  of  house  for  $2,000  of  money.  Money 
has  become  so  scarce  on  account  of  the  govern- 
ment calling  in  three-quarters  of  its  volume,  that, 
like  the  scarce  potatoes,  the  price  of  it  has  so 
risen  that  no  one  else  will  sell  it  any  less.  All 
having  money  want  as  good  as  a  $4,000  house  for 
$2,000  worth  of  money. 

Therefore,  while  the  law  of  supply  and  demand 
as  applied  to  trade  and  commodities  will  hold 
good,  the  man  so  using  it  must  be  consistent 
enough  to  apply  it  to  the  matter  of  money,  and  to 
the  greater  or  less  amount  of  it  in  circulation  ; 
since  money,  under  the  natioii  s  law,  measures  all 
values  by  its  quantity,  and  is  intended  to  supply 
a  medium  of  exchange  of  commodities,  and  also  to 
be  the  instrument  for  the  liquidation  of  all  debts. 


CHAPTER    XIV. 

REVIEW    AND    SUMMARY    OF    OVERPRODUCTIONS, 
ETC. 

Having  passed  over  a  wide  field  in  seeking  to 
account  for  the  thirty  years'  fall  in  prices,  a  brief 
review  may  be  needful  in  assisting  the  reader  to 
fix  upon  the  true  cause. 

In  the  outset  we  were  positive  of  one  undeniable 
fact,  and  that  was  the  constant  fall  in  prices  ;  but 
while  all  were  agreed  upon  that  fact,  and  also  upon 
the  fact  of  the  injury  to  business  and  suffering  to 
the  people  resulting  there  from,  we  found  but  few 
who  understood  the  true  cause  of  it. 

In  order  to  treat  the  cause  scientifically,  it  was 
necessary  to  go  back  to  the  year  in  which  prices 
began  to  fall,  and  to  seek  for  the  cause  at  that 
time,  rather  than  to  try  to  ascertain  it  in  the  con- 
ditions existing  after  years  have  wrought  their 
havoc  in  prices.  By  beginning  at  the  wrong  end 
of  an  investigation  we  are  not  only  apt  to  mis- 
take effect  for  cause,  but  we  often  attribute  that 
as  a  cause  which  did  not  exist  at  the  beginning 
of  the  trouble, —  as,  for  instance,  "overproduc- 
tion." There  was  no  overproduction  in  1866. 
160 


REVIEW  OF  OVERPRODUCTION.  l6l 

There  was  a  great  scarcity  of  goods  everywhere, 
which  scarcity  continued  for  some  five  years  after 
the  fall  in  prices  began,  —  showing  that  accumu- 
lation of  goods  was  the  effect  rather  than  the 
cause  of  fall  in  prices  ;  but  once  becoming  a  con- 
comitant cause  from  which  prices  were  depressed, 
it  was  only  one  of  the  many  little  feeders  to  the 
mighty  stream  of  causes,  —  like  a  river,  which, 
while  it  has  its  prime  great  source,  is  often 
swollen  by  many  tributaries,  though  even  these 
tributaries  do  not  add  much  until  the  heavy  rains 
swell  their  normal  size. 

In  the  stream  of  causes  of  falling  prices,  over- 
production is  well  down  the  list  of  tributaries. 
Taking  money  contraction,  which  commenced  dur- 
ing 1866  and  1867,  another  tributary  to  the  cause 
comes  in  before  overproduction  ;  it  is  that  of  pre- 
mium on  gold.  It  must  be  remembered  that  as 
fast  as  the  currency  was  contracted,  the  premium 
fell  on  gold  ;  and  since  the  duties  at  the  custom- 
house were  paid  in  gold,  the  premium  was  the 
regulator  of  our  tariff.  In  July,  1864,  gold  sold 
for  $2.85.  This  was  an  addition  of  $1.85  on 
every  dollar  paid  on  the  fi.xed  tariff  schedules,  and 
very  naturally  it  was  a  prohibitory  tariff,  and  kept 
out  goods  which  had  always  been  made  abroad, 
but  which  were  now  made  at  home.  As  fast  as 
the  tariff  was  reduced  through  the  fall  in  gold,  an 
increase  of  imported  goods  followed  ;  but  the 
reader  must  remember  that  it  was  the  contraction 


1 62  FALLING  PRICES. 

of  currency  which  caused  the  fall  in  gold,  which 
in  turn  caused  a  drop  in  the  tariff ;  and  this  was 
followed  by  large  importations  of  goods,  forcing 
our  workshops  to  close,  or  to  reduce  the  home 
prices  to  meet  the  foreign  prices.  As  a  result  of 
this,  the  markets  became  overstocked,  factories 
began  to  shorten  time  and  cut  wages.  It  was  at 
this  time  that  the  cry  of  "overproduction"  was 
raised  as  the  cause  of  the  trouble  ;  when  the  truth 
was  that  the  real  cause  —  contraction  —  had  been 
doing  its  work  for  five  or  six  years,  and  the  lower- 
ins:  of  the  tariff  and  the  overstocked  markets  were 
both  results,  and  not  causes. 

As  prices  continued  to  fall,  from  continued  con- 
traction of  money,  new  tributaries  of  secondary 
causes  were  felt,  and  these  in  turn  were  put  forth 
as  the  prime  cause.  Stories  of  fabulous  prices 
paid  for  labor  here  made  the  workers  in  the  old 
countries  uneasy,  and  we  had  a  great  influx  of  im- 
migration. This  in  turn  was  seized  upon  as  a 
cause  of  our  people  being  deprived  of  labor,  and 
of  the  hard  times  ;  while  the  times  had  begun  to 
grow  hard  long  before  increased  immigration  took 
place.  But  contraction  kept  on  its  steady  course, 
and  prices  correspondingly  fell.  Although  silver 
was  at  a  premium  over  gold,  the  political  powers 
would  not  allow  it  to  be  coined,  making  the  pinch 
of  money  tighter  and  tighter. 

In  1877,  as  a  result  of  this  contraction,  times 
were  well-nigh  as  bad  as  they  could  possibly  be. 


RE  VIE  IV  OF  OVERPRODUCTION.  1 63 

It  was  estimated  that  there  were  three  millions  of 
people  out  of  work  at  this  time,  though  those 
having  work  were  receiving  high  wages,  as  com- 
pared with  wages  of  to-day ;  the  merchandise 
and  manufactured  goods,  however,  were  relatively 
much  lower.  It  was  at  or  about  this  time  that 
improved  machinery  began  to  enter  the  field  for 
competition  with  hand-labor  ;  this  started  the  cry 
against  machinery,  and,  in  time,  it  also  was  given 
out  as  the  cause  of  the  hard  times,  while  it  was 
only  another  tributary  now  felt  by  the  more  acute 
and  intensified  depressed  condition. 

Lastly  comes  the  greatest  alleged  cause,  "  lack 
of  confidence."  This  is  the  complaint  of  last 
resort,  after  all  others  have  failed.  This  la.st  cry 
usually  comes  from  the  bankers  and  brokers,  men 
who  have  watered  stocks  and  questionable  securi- 
ties to  sell.  The  innocent  and  credulous  people, 
having  had  their  fingers  burned  many  times  in 
handling  these  stocks  and  securities,  now  naturally 
"lack  confidence,"  and  their  timidity  and  indis- 
position to  invest  is  announced  as  the  cause  of 
our  hard  times. 

It  will  thus  be  seen  that  nearly  every  trade  and 
calling  has  a  special  theory  to  bring  forward.  The 
merchant  finds  the  market  blocked  with  goods,  and 
no  buyers  ;  to  him  the  cause  of  falling  prices  is 
overproduction.  The  wage-earner  is  displaced  by 
machinery,  and  to  him  improved  machinery  is  the 
cause.      The    native  laborer   is   crowded   out    by 


164  FALLING    PRICES. 

the  immigrant,  and  to  him  immii^ration  is  the 
cause.  The  broker  and  the  banker  find  the  peo- 
ple do  not  "walk  into  my  parlor,"  and  they  cry 
out,  "  Lack  of  confidence  !  " 

All  this  time,  however,  prices  were  gradually 
falling  lower  and  lower,  while  the  first  cause  of 
the  depression  still  remained  in  full  force.  Any 
attempt  to  overcome  this  cause  during  the  past 
thirty  years  by  any  increase  of  currency  has  been 
met  by  the  very  stoutest  opposition  on  the  part  of 
organized  capital.  But  when  the  real  cause  shall 
be  removed  by  restoring  to  the  people  a  sufBcient 
volume  of  money  to  enable  them  to  carry  on  busi- 
ness, then,  and  not  before,  will  prosperity  be 
restored,  and  labor  and  capital  alike  find  profit- 
able employment. 

We  now  come  to  the  disastrous  results  of  fall- 
ing prices.  There  are  few  outside  the  small 
number  of  the  excessively  rich  who  have  not 
felt  the  heavy  hand  of  shrinkage  and  depression 
either  on  their  property,  their  business,  or  their 
income  during  the  past  thirty  years.  This  does 
not  show  itself  in  public  to  the  extent  of  the  suf- 
fering experienced,  but  has  been  carefully  con- 
cealed and  borne  in  private. 

By  studying  circular  No.  123,  issued  by  the 
Treasury  Department  of  the  United  States  in 
July,  1896,  it  will  be  observed  that  on  page  54 
it  states  that  we  have  $1,222,618,792  in  coin  and 
bullion  in  the  nation  and  the  Treasury.     Of  course 


REVIEW  OF  OVERPRODUCTION.  1 65 

this  is  all  guesswork,  since  no  man  living  can  tell 
how  much  or  how  little  gold  or  silver  there  is  in 
the  pockets  of  seventy  millions  of  people.  On  the 
same  page,  however,  one  can  observe  that  in  1875 
there  were  but  twenty-five  millions  of  dollars  and 
bullion  in  the  whole  country,  which  of  course  in- 
cluded the  United  States  Treasury;  in  1877  this 
had  suddenly  jumped  into  one  billion  seven  mil- 
lions, in  round  numbers.  Other  tables  in  the 
circular  show  an  export  of  from  three  to  forty-two 
millions  of  gold  per  annum.  This,  with  the 
amount  taken  out  of  the  country  by  tourists, 
and  the  amount  used  in  the  arts,  must  make 
the  amount  in  circulation  a  very  difficult  prob- 
lem to  solve ;  yet  upon  this  unknown  quantity 
the  government  bases  a  per  capita  of  circula- 
lation  which  measures  the  price  of  our  products, 
commodities,  and  labor. 

There  are  two  reasons  why  the  merchant  should 
exercise  vigilance  uj^on  this  matter  of  volume  of 
currency.  The  first  is,  tliat  when  currency  is 
contracted,  one  of  two  things  results  :  either  the 
banks  avail  themselves  of  the  opportunity  to  loan 
their  credit  (which  cost  them  nothing),  or  panic 
and  the  fall  in  price  of  all  commodities  in  the 
hands  of  merchants  and  manufacturers  take  place, 
not  mentiom'ng  the  heavy  loss  in  outstanding  ac- 
counts. Why  the  merchants  and  manufacturers 
do  not  keep  a  lojjby  in  ('ongress  to  work  for  an 
increase  of  the  volume  of   money  in  ratio  to  in- 


1 66  FALLING  PKJCES. 

crease  of  population  and  business  demands  —  as 
do  the  bankers,  who  pack  the  halls  of  legislation 
for  the  purpose  of  constantly  reducing  the  volume 
—  is  more  than  I  can  account  for.  But  the  rea- 
son most  generally  offered  is,  that  the  banks 
threaten  any  and  every  merchant  and  manufac- 
turer who  dares  to  make  any  move  to  increase  the 
nation's  currency,  or  to  join  any  party  having  that 
for  its  object.  This  opposition  on  the  part  of  the 
banks  to  an  increase  of  currency  began  with  the 
earliest  history  of  our  country,  and  it  has  ever 
been  the  policy  of  every  great  party.  So  far,  no 
one  of  our  great  parties,  except  the  early  Republi- 
can party  under  Lincoln,  ever  dared,  even  in  the 
needs  of  war,  to  defy  the  banks  in  this  regard. 
But  the  importance  of  such  an  increase  was  never 
before  understood  as  it  is  to-day.  In  fact,  the 
merchants  and  manufacturers  never  had  anything 
to  make  them  think  about  monetary  problems  as 
the  present  fall  in  prices  has  done.  When  print 
cloth  falls  from  38  1-2  cents  to  21-8  cents  ;  when 
raw  cotton  falls  from  122  cents  to  5  cents  ;  and  in 
fact  the  price  of  everything  else  falls  in  the  same 
ratio,  unless  it  is  held  up  by  a  trust ;  and  when  to 
create  this  trust  the  capital  from  England  or  Wall 
Street  supplants  the  capital  of  those  who  are  es- 
tablished in  business,  out  of  whose  hands  the 
trust  now  forces  it  by  bank  legislation  in  Con- 
gress, and  thus  brings  about  the  destruction  of  all 
who  are  engaged  in  a  legitimate  form  of  business, 


REVIEW  OF  OVERPRODUCTION.  1 67 

—  when,  I  say,  all  this  comes  to  pass,  then  the 
average  business  man  begins  seriously  to  think 
that  something  is  wrong,  and  that  perhaps  it  is 
for  his  interest  to  "meddle  with  politics,"  and 
even  to  study  and  make  himself  acquainted  with 
the  principles  of  political  economy. 

It  is  said  that  appearances  are  deceitful ;  and  to 
no  single  phase  of  life  does  this  maxim  apply  more 
than  to  the  financial  standing  of  many  in  the  com- 
munity to-day.  That  other  old  saying,  that  pride 
and  poverty  walk  together,  applies  to  the  present 
times  as  never  before.  This  all  results  from  the 
great  change  which  has  taken  place  in  the  circum- 
stances of  so  many  in  the  community.  Individual 
cases  of  misfortune  will  occur  in  the  best  of  times  ; 
but  the  nation  has  never  passed  through  a  period 
of  thirty  years  of  such  depression  before,  so  that 
it  has  now  become  the  exception  to  find  a  man 
making  money  in  open  market.  In  fact,  business 
men,  like  the  provision  dealer  who  puts  the  best 
fruit  on  top  of  the  barrel,  arc  making  their  best 
show  in  public,  wliilo  they  are  agonizing  in 
private. 

Many  are  misled  to  think  that  hard  times  exist 
only  in  their  imaginations,  or  in  their  particular 
cases  ;  but  let  them  try  to  sell  goods  at  old  fig- 
ures, or  even  try  to  collect  old  accounts,  or 
perhaps  ask  a  little  assistance  even  of  those  from 
whom  they  feel  they  have  a  right  to  ask  a  favor, 
and  they  will  soon   find  the  idea  vanishing  from 


1 68  FALLIXG   PRICKS. 

their  minds  that  their  case  of  distress  is  an  isolated 
one. 

Go  to  any  part  of  the  great  business  commu- 
nity, and  you  will  find  this  experience  the  same, 
although  the  country  does  not  suffer  like  the  city 
from  the  sensitiveness  of  pride.  The  business 
man  suffers  by  comparison  with  the  man  who  has 
money  to  invest ;  for  the  latter  is  now  richer  than 
ever,  as  his  "goods"  (bonds)  are  constantly  rising 
in  the  market.  A  ten  or  twenty  years'  bond  invest- 
ment, non-taxable,  with  everything  else  growing 
cheaper,  is  what  makes  good  times  for  the  invest- 
ing class,  enabling  them  to  live  more  sumptuously 
than  before ;  but  the  mercantile  community  must 
scrimp  in  every  conceivable  way  to  make  both 
ends  meet,  and  this  forced  economy,  compared 
with  the  increasing  luxury  of  those  with  whom 
they  once  could  vie  in  living  expenses,  creates 
keenly  uncomfortable  feelings.  All  this  comes 
from  a  change  in  the  nation's  financial  system, 
producing  conflicting  interests  among  classes. 

Then  there  are  those  who,  not  understanding 
finance,  and  having  confidence  in  their  brokers  and 
bankers,  have  placed  their  all  in  second  and  third 
mortgage  bonds  and  watered  stocks,  who  when 
the  "  squeeze "  came  on  lost  their  all,  and  were 
thrown  on  a  world  gradually  growing  harder  and 
closer  under  the  same  system  that  had  robbed 
them  ;  and  they  find  it  almost  an  utter  impossi- 
bility to  get  anything  to  do.     This  class,  whose 


RE  VIE  IV  OF  OVERPRODUCTIOX.  1 69 

numbers  are  simply  incalculable,  being  oblivious 
of  the  shrewd  scheme  adopted  by  the  crafty  ma- 
nipulators of  their  holdings,  instead  of  retaining 
their  bonds  and  stocks,  were  shaken  out  of  them 
by  the  shrinking  process ;  and  these  selfsame 
properties,  under  the  reorganization  which  fol- 
lowed, are  now  owned  by  multi-millionaires.  In 
fact,  had  it  not  been  for  the  shrinkage,  the  first- 
mortgage  bondholders  would  not  have  gotten  hold 
of  the  properties  at  all.  These  results  are  the 
fruits  of  the  present  system  of  contraction  and  its 
consequent  falling  prices. 

I  have  not  yet,  however,  presented  the  darkest 
picture  resulting  from  the  work  of  contraction. 
I  have  not  yet  shown  the  ruin  and  despair  it  has 
carried  into  the  fireside  of  farm  and  home,  of  old 
and  young  alike,  of  hundreds  and  hundreds  of 
thousands  throughout  the  land,  who  in  early  man- 
hood and  womanhood  took  up  life  together  in 
dead  earnest,  and  settled  in  rural  regions  in  the 
East  or  West,  where  they  built  their  homes  for 
life ;  or  the  industrial  and  frugal  young  couples 
who  have  undertaken,  in  or  near  our  cities,  to 
build  and  pay  for  a  home,  —  all  of  whom,  by  this 
merciless  robber  -  system  of  shrinkage  on  their 
little  holdings,  by  loss  of  time  and  enforced 
idleness,  and  by  constantly  falling  prices  of 
products,  have  had  taken  from  ihcm  farm  and 
home  alike,  and  seen  them  transferred  to  crafty 
"investors,"    whose    cold-blooded    chuckling    we 


I/O  FALLING   PKTCRS. 

can  almost  hear  as  the  sheriff  hands  them  the 
title-deeds   of  these  distrained   possessions. 

Then  there  is  that  great  disinherited  class  who 
under  present  systems  can  never  hope  to  own  a 
home ;  who  were  not  only  born  tenants,  but  who 
must  live  and  die  tenants,  since  they  can  never 
see  the  daylight  of  hope  under  our  present  sys- 
tems, —  systems  which  do  not  favor  the  poor  or 
even  the  moderately  rich,  but  which  favor  the 
excessively,  enormously  rich.  Thoughtful  men 
and  true  patriots  are  becoming  startled  at  the 
rapidly  approaching  events  which  cast  their  dark 
and  ominous  shadows  before,  —  events  which  will 
surely  bring  to  us  more  grievous  troubles  than 
any  we  have  yet  experienced,  unless  men  of 
wisdom,  honor,  and  justice  get  control  of  our 
nation's  politics. 

In  showing  the  cause  which  produced  the  long 
depression  under  which  the  nation  has  suffered,  I 
desire  to  hold  myself  above  any  party  opinion,  or 
the  seeking  for  any  party's  advantage.  To  get 
at  the  cause  scientifically  is  alone  my  desire. 

There  are  a  number  of  systems  which,  if 
adopted,  would  tend  to  lower  values  and  de- 
press certain  lines  of  business  for  a  time,  until 
the  special  business  under  the  system  in  vogue 
had  adjusted  itself  to  the  new  system,  when  all 
would  be  running  smoothly.  But  I  shall  try  to 
show  that  the  broad  system  governing  all  values 
in  every  department  of  trade,  industry,  property, 


REVIEW  OF  OVERPRODUCTIOX.  I/I 

aoriculture,  and  labor,  —  the  one  great  lever  which 
has  the  power  to  lift  or  lower  the  values  of  all 
wealth  at  the  same  time,  —  is  in  the  hands  of  the 
people  to  change  as  they  elect,  through  those 
chosen  to  represent  them  in  the  legislative  halls 
at  Washington. 

I  have  already  shown  in  Chajiter  V.,  under  the 
head  of  Money,  that  every  nation  has  its  own 
independent  monetary  system.  No  nation  would 
be  an  independent  nation  which  did  not ;  and  any 
nation  which  becomes  so  weak  as  to  be  forced  to 
accept  dictation  upon  this  one  vital  function  in 
its  government,  is  dependent  upon  that  nation 
so  dictating  for  its  sinews  of  war.  Therefore, 
the  first  and  greatest  of  all  functions  in  govern- 
ment, so  far  as  a  people  are  concerned,  is  to  have 
the  most  thorough  and  complete  control  of  the 
measure  of  values  upon  individual  wealth  and 
labor.  Even  the  coal  miners  in  their  last  na- 
tional strike  made  this  contention  one  of  their 
strongest  items  of  comi)lainl  ;  and  it  was  con- 
ceded by  all  to  be  not  only  a  gross  injustice  but 
downright  robbery  that  the  coal  companies  should 
do  all  the  weighing  of  the  miner's  coal,  not  allow- 
ing him  to  be  present  to  see  if  he  got  fair  weight. 

Now,  the  gold  dollar  which  is  insisted  upon  by 
the  Wall  Street  millionaires  is  as  much  a  loaded 
dollar  as  any  dice  ever  thrown  by  the  gambler. 
These  coin  dollars  are  made  jjayable  to  the  bond- 
holders, in   principal  and   interest.      Why  did  not 


172  FALL  [Arc   PRLCES. 

the  law  require  that  the  farmer  and  laborer  should 
be  paid  in  coin  ?  Simply  because  there  was  not  a 
majority  of  farmers  and  laborers  in  the  Congress 
which  made  the  law  ;  the  bankers  and  bondholders 
were  greatly  in  the  majority.  At  that  time  the 
American  people  knew  no  more  about  finance 
than  a  Southern  slave  knew  about  the  elective 
franchise ;  but  to-day  the  Southern  ex-slave  knows 
more  about  the  elective  franchise,  and  to-day  the 
American  people  also  understand  more  about  the 
principle  involved  in  making  a  dollar  out  of  gold 
or  one  out  of  paper. 

Wall  Street  spent  millions  of  dollars  in  trying 
to  show  the  farmers  and  cotton-growers  of  the 
South  and  West  that  $2.50  per  bushel  for  wheat, 
which  would  pay  the  Wall-streeters  ^2.50  of  debt, 
was  not  as  good  for  the  farmer  as  fifty  cents  per 
bushel,  which  would  only  pay  the  Wall-streeters 
fifty  cents  of  debt.  It  is  not  often  that  the  Wall- 
streeters  are  seized  with  such  solicitous  concern 
about  the  welfare  of  the  farmer.  Had  this  stock 
of  anxiety  on  the  part  of  the  brokers  been  reduced 
when  their  representatives  in  Congress  gave  away 
alternate  twenty-mile  sections  of  land  on  both  sides 
of  the  Pacific  Railroad  from  Omaha  to  California, 
and  in  addition  a  loan  of  sixty-four  millions  of  dol- 
lars in  bonds,  the  farmer  might  have  had  more  of 
Uncle  Sam's  domain  left  upon  which  to  settle  to- 
day ;  and  had  it  not  been  for  the  loaded  Wall 
Street  dollar,  by  which  the  cotton-grower's  cotton 


REVIEW  OF  OVERPRODUCTION.  1 73 

has  been  measured  for  the  past  thirty  years,  the 
cotton-grower  might  have  been  getting  forty  cents 
all  these  years  instead  of  five  cents,  which  is  all 
this  "honest  dollar"  measures  out  to  him  to-day. 
But  under  such  a  more  righteous  state  of  things 
Wall  Street  would  have  been  in  debt  to  the  cotton- 
growers,  and  the  people  of  the  South  would  have 
been  satisfied  to  stick  to  cotton-growing, — in 
which  case  they  would  not  now  be  reduced  to 
such  a  state  of  poverty  that  they  have  been  driven 
to  accept  Wall  Street  capital  to  build  cotton-mills, 
and  to  give  famishing  children  fifty  cents  a  week 
for  twelve  hours  a  day  labor,  the  result  of  which, 
according  to  the  Arkwright  Club,  is  now  closing 
Northern  mills.  This  Arkwright  Club  emphasizes 
"Southern  competition"  and  "overproduction," 
but  is  as  silent  as  the  grave  upon  the  havoc  the 
loaded  Wall  Street  dollar  has  wrought  upon  the 
people,  —  first,  by  undermining  protection  from 
foreign  imports,  and  at  the  same  time  taking 
nearly  all  values  out  of  their  products ;  and, 
secondly,  by  reducing  them  to  such  an  imjDover- 
ished  condition  that  they  are  no  longer  able  as 
consumers  to  reduce  the  accumulated  products  of 
their  mills. 

It  is  a  well-known  fact  that  the  South,  because 
of  its  climate,  was  formerly  a  great  market  for 
manufactured  cotton  goods  ;  but  to-day,  because 
of  its  poverty,  resulting  from  low  prices  caused  by 
tampering  with  the  dollar  of  the  nation,  and  also 


174  FALLING   PIUCF.S. 

because  of  trust-conspiracies  which  have  forced 
clown  the  price  of  its  raw  sugar, — the  banks  act- 
ing with  the  trust  in  withholding  accommodations 
during  the  selling  season,  thus  helping  the  merci- 
less buying  agents  of  the  Sugar  Trust  to  press 
collections  in  order  to  force  sales  at  bankrupting 
prices, —  because  of  all  this,  I  say,  that  market  no 
longer  exists.  Thus,  by  the  combined  powers  of 
banks,  loaded  dollars,  and  trust-syndicates,  filching 
the  annual  wealth  produced  by  the  people,  leaving 
them  helpless  as  purchasers,  resulting  in  accu- 
mulated stocks,  stoppage  of  mills,  and  bringing 
the  East  face  to  face  with  Southern  conditions, 
the  Arkwright  Club  now  has  to  meet  a  crisis  in 
its  own  section.  And  in  its  despair  the  Arkwright 
Club  folds  its  hands,  rolls  its  eyes  towards  heaven, 
and  with  all  solemnity  cries,  "  Overproduction  ! " 
"  Southern  competition  !  "  "  Lack  of  confidence  !  " 
The  Club  then  formulates  a  prescription  for  the 
cure  of  these  troubles,  which  is,  "  Reduce  the 
wages  of  the  operatives  still  lower,  and  buy  your 
cotton  cheaper,"  —  a  policy  which  if  carried  out 
means  that  the  new  goods  manufactured  on  the 
lower  figures  would  force  down  all  the  stocks 
already  on  hand,  not  only  in  the  warehouses  of 
the  mills,  but  all  those  now  in  the  jobbers'  and 
retailers'  hands  ;  while  the  holders  of  these  stocks 
would  be  called  upon  to  pay  what  they  owe  to  the 
banks  in  one-hundred-cent  dollars,  or  in  the  "best 
dollars  in  the  civilized  world,"  and  their  holdings 


REVIEW  OF  OVERPRODUCTION.  1 75 

in  goods  would  leave  them  only  seventy-five  cents 
on  the  dollar.  What  a  remedy !  What  a  subter- 
fuge to  bolster  up  Wall  Street's  "loaded  dollar" 
system  !  All  this  shrinkage,  all  this  misery,  all 
this  robbery  of  worker  and  producer  is  welcomed 
sooner  than  to  raise  values,  restore  wages,  and 
give  full  employment  by  an  increase  of  money 
sufficient  for  the  purpose,  and  thus  enable  the 
people  to  live  once  more  and  become  consumers 
of  the  products  they  create ! 

The  only  method  by  which  better  times  can  be 
realized  is  by  restoring  values  in  products  ;  and 
the  only  power  by  which  that  can  be  done  is  by 
taking  the  money  control  from  Wall  Street  and 
placing  it  in  the  hands  of  the  people,  —  letting  the 
increase  of  currency  go  on  until  the  masses  are 
restored  not  only  to  bare  living  conditions,  but  to 
comfortable  and  humane  conditions.  This,  and 
this  only,  is  the  remedy  for  falling  prices  and  hard 
times. 

While  contraction  of  the  currency  is  the  first 
and  underlying  cause  of  falling  prices,  falling 
prices  in  their  turn  carry  loss  to  every  one  who 
holds  that  class  and  nature  of  wealth  which  falls 
or  shrinks  in  value.  It  must,  however,  be  remem- 
bered that  all  kinds  of  wealth  or  holdings  do  not 
fall  with  contraction  of  the  currency.  Some  kinds 
of  property  may  shrink,  and  other  kinds  advance 
at  the  same  time,  i-'or  in.stancc,  while  railroad 
stocks    will    naturally    fall     under    contraction    of 


176  FALLING   PRICES. 

money  in  sympathy  with  most  other  property, 
raih-oad  bonds  may  at  the  same  time  retain  their 
market  value,  and  in  many  instances  become  of 
more  value.  This  results  from  the  fact  that  the 
bonds  of  a  road  have  a  fixed  rate  of  interest ;  and 
when  the  bonds  are  the  first-mortgage  bonds,  and 
the  property  will  bring  many  times  more  than  the 
price  of  the  bonds,  then  the  bonds  will  advance  in 
the  same  market  in  which  the  stock  will  fall.  The 
reason  for  this  is  clear.  The  stock  no  longer  pays 
dividends,  as  under  the  hard  times  the  road  is  not 
earning  sufficient  to  pay  interest  on  the  bonds, 
and  holders  of  stock  begin  to  sell,  which  breaks 
down  the  price.  Should  the  road  have  second  and 
third  mortgage  bonds,  these  in  turn  would  be  sim- 
ilarly effected.  The  third  mortgage  will  suffer 
first,  and  fall  first  in  price ;  after  which,  the 
second  may  or  may  not  suffer.  Under  such 
severe  depression  as  to  force  foreclosure  on  the 
third  mortgage,  for  default  in  interest,  the  stock 
is  usually  wiped  out.  Thus  it  will  be  seen  that 
the  first-mortgage  bondholder,  hoping  to  get  the 
property,  will  be  willing  to  bid  for  any  of  the  first- 
mortgage  bonds.  Usually  this  class  of  investors 
are  anxious  to  intensify  the  depression  of  prices, 
hoping  that  the  holders  of  the  second  and  third 
mortgage  bond-issues  will  be  forced  to  let  go, 
when  the  holder  of  the  first-mortgage  bonds  can 
bid  in  the  property,  choose  a  reorganization  com- 
mittee, issue  new  stock,  and  list  the  same  on  the 


RE  VIE  IF  OF  OVERPRODUCTIOX.  I  77 

board  of  the  stock  exchange,  and  thus  perhaps 
entrap  a  fresh  list  of  victims  to  be  fleeced  and 
buncoed  by  these  "honest-money"  men  of  Wall 
Street,  who  are  constantly  railing  against  the 
farmers  of  the  West  as  anarchists  and  repudiators, 
when  the  real  reason  why  these  farmers  are  bank- 
rupts and  agitators  is  because  they  have  not  only 
been  robbed  of  the  stock  which  they  subscribed 
for  building  the  roads,  but  also  oppressed  by  high 
freight  and  passenger  rates.  The  Wall  Street 
press  have  chanted  this  strain  of  added  insult  to 
robbery  so  long  that  the  careless  and  unthinking 
throughout  the  land  now  believe  it  ;  for  loss  of 
respect  almost  always  attends  the  loss  of  property, 
while  increase  of  wealth  as  surely  brings  with  it 
increase  of  respect  and  deference  for  those  who 
have  it,  —  which  respect  and  deference  grow  in 
time  into  fear,  so  that  to-day  even  the  government 
dare  not  consult  any  section  or  class  outside  of 
Wall  Street  in  regard  to  its  policy  in  any  emer- 
gency. 

To  show  the  pompousness  and  arrogance  of  the 
Wall  Street  clique  in  its  edicts  to  the  merchants, 
in  order  to  coerce  them  into  consenting  to  legisla- 
tion in  Congress,  I  will  quote  here  the  following 
extract  from  the  Philadelphia  Pnss  (i<S93),  the 
mouth-piece  of  that  clique  : 

Then;  is  real  necessity  for  liie  early  repeal  r)f  llie  silver 
law  now  from  anollicr  point  of  view.      Tlie  hanks  in  all  llie 


178  FALLING   PRICES. 

leading  cities  have  determined  not  to  lend  money,  except  in 
the  case  of  great  necessity  on  the  part  of  the  borrower,  until 
the  Senate  votes.  Merchants  are  suffering  for  cash,  and 
they  are  like  to  suffer  more  this  month  and  next.  Well- 
filled  bank-vaults  are  locked  against  them  until  a  slow  Sen- 
ate repeals  the  purchasing  clause  of  the  July  law.  Such  a 
spectacle  was  never  seen  before.  The  bank  reserves  are 
larger  than  at  any  time  this  year,  —  they  are  nearly  as  large 
in  New  York  as  they  were  a  year  ago,  —  yet  the  whole 
commercial  community  is  inconvenienced,  and  is  in  danger 
of  bankruptcy,  because  cash  is  not  available  until  the  Sen- 
ate acts.  The  New  York  banks  long  ago  locked  up  money, 
and  last  week  it  was  publicly  announced  that  the  Chicago 
banks  had  doae  the  same.  Mr.  Thomas  Dolan,  one  of  the 
leading  manufacturers  of  this  city,  is  c[uoted  as  saying  :  "  A 
president  of  a  trust  company  has  said  to  me  that  he  has 
$1,000,000,  and  he  knows  of  $35,000,000  more,  ready  for 
investment  as  soon  as  the  Senate  passes  the  repeal  meas- 
ure." Mr.  Dolan's  statement  is  absolutely  true.  In  Bos- 
ton the  same  state  of  affairs  exists.  Therefore  repeal  is 
imperatively  demanded  by  the  mercantile  community. 
Thousands  of  solvent  business  men,  looking  into  the  future 
of  but  a  few  weeks,  see  ruin  and  disaster  if  the  vSenate 
doesn't  vote,  or  if  the  bank  officials  don't  relent. 

While  the  demonetization  of  silver,  in  India  and 
the  United  States,  was  of  the  utmcst  importance 
to  the  Lombard  and  Wall  Street  conspirators  in 
the  way  of  adding  power,  financially  and  politically, 
to  the  world's  moneyed  aristocracy,  the  plotters  of 
this  outrage  had  an  ulterior  motive,  by  the  success- 
ful accomplishment  of  which  they  hoped  to  reap, 
and  have  reaped,  a  rich  harvest,  —  namely,  to 
wreck  our  railroads  by  means  of  the  hard  times 


REVIEW  OF  OVERPRODUCTION.  I  79 

intentionally  produced  for  this  very  purpose.  As 
a  result  of  this  wreckage,  one  bold  and  unscrupu- 
lous operator  already  has  control  of  fifty-two  thou- 
sand miles  of  American  railways,  and  is  turning 
heaven  and  earth  so  to  control  financial  legislation, 
by  converting  all  outstanding  money  into  non-legal 
tender,  and  thus  depressing  values  and  business, 
as  to  force  the  balance  of  the  roads  of  the  country 
into  the  hands  of  receivers,  and  form  one  gigantic 
railroad  trust  of  which  he  may  pose  before  an 
astonished  world  as  its  president.  Wall  Street 
has  set  up  the  cry  in  its  press  that  it  would  be  a 
dangerous  political  power  in  the  hands  of  the 
government  to  have  it  come  into  ownership  of  the 
railroads ;  but  not  a  word  is  said  about  the  danger 
of  having  them  come  into  the  hands  of  one  man, 
an  agent  of  a  British  syndicate.  In  order  to  get 
possession  of  these  roads,  think  of  the  millions 
of  innocent  investors  who  must  be  squeezed  out  of 
every  dollar  they  own  in  the  world,  and  whose 
numbers  must  be  added  to  those  whose  life's  hap- 
piness has  been  destroyed  already  by  this  same 
British-paid  exploiter  in  robbing  them  of  fifty-two 
thousand  miles  of  railroad  !  Yet  this  man  is  fairly 
idolized  in  Wall  and  Lombard  Streets,  and  the 
gates  of  the  court  of  St.  James  and  of  the  Cajiitol 
at  Washington  are  swung  wide  open  to  give  him 
fulsome  reception.  This  clima.x  to  a  system 
forced  upon  the  nation  by  the  Wall  Street  bank- 
ers, at  a  time  when  our  country  and  freedom  were 


l8o  FALLING    I'RICES. 

almost  in  their  death  throes,  is  the  vision  which 
Abraham  Lincohi  saw  when  he  wrote,  just  before 
his  assassination,  the  following-  letter  to  a  friend  : 

As  a  result  of  the  war,  corporations  have  been  en- 
throned, and  an  era  of  corruption  in  high  places  will 
follow  ;  and  the  money  power  of  the  country  will  endeavor 
to  prolong  its  reign  by  working  upon  the  prejudices  of  the 
people,  until  all  wealth  is  aggregated  in  a  few  hands,  and 
the  Republic  is  destroyed.  I  feel  at  this  moment  more 
anxiety  for  the  safety  of  my  country  than  ever  before,  even 
in  the  midst  of  war.  God  grant  that  my  suspicions  may 
prove  groundless ! 

This  gigantic  scheme,  plotted  in  1 862,  was  so 
powerful  in  its  very  incipiency  that,  with  a  nation 
divided  against  itself,  even  the  lion-hearted  Lincoln 
could  not  at  such  a  time  throttle  it.  Having  once 
gotten  control  of  national  legislation,  it  has  not 
only  not  let  go,  but  has  entrenched  itself  in  every 
department  of  government,  and  can  now  bid  de- 
fiance to  the  rest  of  the  country.  Well  may 
thinking  men  tremble  for  the  safety  of  their 
country  ;  and  when  they  look  into  its  future,  no 
wonder  they  ask,  "Where  will  this  power  stop  .^  " 
Already  we  have  not  less  than  three  millions  of 
men  who,  under  the  present  withdrawal  of  money 
from  active  enterprise,  can  no  longer  find  employ- 
ment. This  clearly  shows  the  falling  off  in  the 
nation's  wealth-productive  power ;  and  this  lack 
of  employment  and  consequent  falling  off  in  in- 
crease  of  wealth   will   keep  pace  with   the   rapid 


REVIEW  OF  OVERPRODUCTION.  151 

centralization  of  wealth.  The  distribution  of 
wealth  starts  enterprise,  but  the  concentration 
of  wealth  deadens  and  benumbs  enterprise,  and 
in  the  end  is  the  death  of  it.  Every  trust 
and  syndicate,  every  combine  and  corner,  of 
which  so  many  are  now  daily  being  formed, 
gives  evidence  of  how  rapidly  the  decay  of  our 
productive  forces  is  taking  place. 

To  curtail  production  —  that  is,  to  stop  further 
creation  of  wealth  —  is  the  aim  and  object  of 
every  combine.  While  this  means  disease,  and 
ends  in  death,  you  will  hear  men  high  in  power, 
in  order  to  protect  these  monstrosities,  declare 
that  trusts  are  a  public  benefit !  Does  it  not 
come  with  ill  grace  from  a  member  of  the  Presi- 
dent's Cabinet,  —  who,  with  all  his  colleagues,  is 
sworn  to  execute  the  nation's  will,  —  to  state,  in 
a  public  address,  that  trusts,  combinations  to  re- 
strict trade,  are  a  public  benefit  .-*  If  this  is  true, 
then  the  more  we  have  of  them,  the  better.  But 
when  every  manufactory,  every  railroad,  and  all 
the  mines  and  land  arc  in  the  hands  of  trusts, 
it  will  mean  that  all  the  separate  trusts  will  be 
combined  into  one  grand  Trust,  wliich  will  control 
all  the  industries  of  the  country,  and  hold  the 
keys  to  all  enterprise  ;  and  then  whoever  would 
embark  in  any  business  venture —  if  any  would  be 
so  audacious  —  must  first  get  the  consent  ol  the 
great  Trust,  and  therenfter  jmy  tribute  to  it. 
Under  such   a  regime  as  this,   prices   would   no 


1 82  FALLING  PRICES. 

longer  be  based  on  the  cost  of  manufacturing, 
because  the  object  of  organizing  a  trust  is  avow- 
edly to  manufacture  at  a  minimum  and  to  sell  at 
the  maximum  figure.  A  trust  is  formed  primarily 
to  force  prices  to  the  highest  bearable  point  for 
profit, — that  is,  to  the  point  verging  on  rebellion 
on  the  part  of  the  people.  The  people,  however, 
can  never  repossess  anything  once  fairly  in  the 
grip  of  a  trust,  no  matter  what  exorbitant  price  is 
charged.  Take  the  commodity  of  oil,  for  in- 
stance. All  the  oil  fields  are  in  the  control  of 
the  trust,  and  how  can  the  people  ever  get  pos- 
session again  .''  The  trust  could  double  its  price, 
and  under  trust  conditions  the  dealers  would  be 
helpless.  Will  they  import  from  the  Russian 
fields .-'  But  here  they  would  meet  with  a  double 
barrier.  The  Russian  dealers  are  under  trust 
contract  not  to  sell  within  our  territory  ;  should 
they  do  it,  retaliation  on  the  part  of  the  trust 
here  would  be  the  result.  But  even  if  oil  could 
be  brought  from  abroad,  the  trust  has  such  com- 
plete control  over  national  legislation  that  they 
could  prohibit  by  tariff  its  introduction.  The 
trust  having  once  gotten  control,  the  market 
becomes  its  slave,  and  the  matter  of  price  is  a 
question  of  policy  only.  As  to  the  cost  of  pro- 
duction, that  depends  on  the  cost  of  labor  ;  but  a 
trust  no  more  considers  the  welfare  of  the  laborer 
than  it  does  that  of  the  consumer.  To  pay  the 
least  possible  to  the  laborer,  and  to  charge  the 


REVIEW  OF  OVERPRODUCTIOiX.  I  83 

most  possible  to  the  consumer,  —  and  to  carry 
this  policy  to  the  very  verge  of  forcing  both 
laborer  and  consumer  to  open  and  forceful  re- 
bellion, —  this  is  the  cold-blooded  method  of 
every  trust.  Yet  a  Cabinet  Secretary  says  that 
trusts  are  public  benefactors  ;  and  Cabinet  Sec- 
retaries, are,  of  course,  "  all  honorable  men  !  " 

This  trust  principle  can  be  carried  out  as  effect- 
ively in  farming  as  in  any  other  calling  in  life. 
Numbers  and  area  play  no  part  in  it.  A  "  pro- 
moter "  knows  his  profession.  The  farmer  says 
the  trust  can  never  include  tilling  the  soil  in  its 
many  monopolies.  The  tanners  of  leather  once 
made  the  same  idle  remark  ;  but  to-day  if  there  is 
a  tannery  outside  the  leather  trust,  it  will  be 
inside  it,  or  in  bankruptcy,  before  long.  How  can 
the  land  be  tilled  by  a  trust  ?  Under  the  bank- 
money  trust  the  railroad  trust  will  have  every  rail- 
road in  its  power  within  five  years,  at  the  average 
rate  of  confiscation  of  the  past  five  years.  Nearly 
all  the  bonds  on  the  remaining  roads  outside  the 
trust  have  been  written  in  condition  of  gold  pay- 
ments to  this  end.  This  same  bank-money  power 
can  confi.scate  all  lands  whenever  it  desires.  It 
only  needs  to  contract  the  money  volume  suffi- 
ciently to  reduce  values  of  products  and  land,  to 
di.slodge  every  farmer  in  the  land.  This  was  done 
in  I^ngland.  When  the  Lords  of  ICngland  desired 
to  get  hold  of  the  land,  they  first  made  all  obliga- 
tions payable  in  gold,  and  in  fifteen  years  they 


184  FALLIXG    PRICES. 

reduced  sixty  thousand  landholders  to  seven  thou- 
sand ;  and  the  banks  would  only  need  to  get  this 
same  legislation  through  our  Congress  to  accom- 
plish this  same  result  here.  We  are  as  yet  only 
in  the  incipient  stages  of  this  trust  principle.  It 
logically  leads  directly  back  to  the  feudal  system 
in  any  country  where  it  once  gets  a  foothold.  Of 
course  the  Lords  of  the  Dollar  in  this  country  will 
not  touch  the  land  until  the  public  utilities  are 
safely  in  their  holding  ;  but  when  their  fortunes 
become  unwieldy  from  their  magnitude,  and  all 
other  forms  of  investment  have  been  absorbed, 
recourse  will  then  be  had  to  the  land  for  security, 
and  also  for  the  purpose  of  controlling  the  vote  of 
the  tenants.  To  show  what  can  be  done  by  mak- 
ing mortgages  payable  in  gold,  which  the  moneyed 
aristocracy  are  now  practising  on  the  farmers  of 
the  nation,  it  is  only  necessary  to  quote  Daniel 
Webster,  who  said  :  "  When  -our  paper  money  is 
made  payable  in  specie  on  demand,  it  will  prove 
the  most  certain  means  that  can  be  used  to  fertil- 
ize the  rich  man's  field  by  the  sweat  of  the  poor 
man's  brow."  To  make  all  obligations  payable  in 
something  impossible  to  get  is  a  trick  being 
played  upon  the  unsophisticated  farmer  by  the 
banker,  which  it  would  make  a  footpad  feel 
abashed  to  be  caught  at.  Yet  this  is  the  low, 
mean,  and  contemptible  trick  which  the  moneyed 
class  in  this  country  copies  from  the  British  sys- 
tem adopted  in  1 819  for  the  same  purpose.     Yes, 


REVIEW  OF  OVERPRODUCTION.  1 85 

the  trust  will  do  it  all.  Gold  was  the  first  com- 
modity fastened  on  by  the  trust,  and  to-day  it 
is  hard  to  find  anything  free  from   its  grasp. 

To  understand  the  evil  effects  of  falling  prices, 
one  must  be  interested  financially  in  some  enter- 
prise ;  then  he  will  feel  the  shrinkage  of  values  in 
materials,  in  mills,  farms,  or  other  property.  He 
will  then  find  he  must  employ  commission  men 
and  agents  to  do  the  very  work  which  the  buyers 
once  did  by  looking  for  goods  themselves.  Now 
the  hard  times  force  the  manufacturer  to  hunt 
a  market.  He  is  compelled  to  employ  men  to 
scour  the  country  at  his  expense.  This  he  cannot 
charge  to  cost  of  goods,  as  the  large  concerns 
which  come  to  the  market  are  allowed  the  amount 
on  bill  paid  to  the  commercial  traveller.  The 
buyer  who  could  not  obtain  tliis  allowance  could 
not  hold  his  position.  Under  the  hard  times, 
growing  out  of  continually  falling  i)rices,  the  mill 
men  are  forced  to  open  warehouses  and  sales- 
rooms in  cities,  and  resort  to  commission  houses. 
The  commission-house  men,  tricked  into  believing 
in  advancing  prices  and  a  boom  by  politicians  who 
serve  the  banks,  encourage  the  mills  to  make  large 
stocks  of  goods  ahead  ;  ujjon  these  the  commission 
men  advance  money  borrowed  from  the  l^anks. 
Hut  the  trade  is  disappointing;  prices  drop,  and 
the  borrowed  money  comes  due.  The  bank  or  the 
manufacturer  in  this  rase  must  suffer  ;  and  the 
manufacturer  is  sacrificed  to  save  the  bank. 


^86  FA  LUNG   J' A' ICES. 

In  hard  times  the  commission  man  is  forced  to 
\vork  for  the  buyer,  because  when  the  times  are 
good,  prices  are  constantly  advancing.  With  a 
large  volume  of  money  in  circulation  every  one 
turns  buyer.  The  mills  are  sought  by  the  buyer ; 
the  commercial  traveller  and  commission  house 
are  therefore  out  of  an  occupation,  for  under 
prosperous  times  the  mills  have  orders  a  year 
ahead,  and  every  piece  of  goods  goes  from  the 
mill  by  the  fast  freight-train  direct  to  its  anxious 
customer,  and  not  to  a  commission  house  as  under 
falling  prices,  to  be  hauled  and  picked  over,  and 
finally  slaughtered  by  the  commission  merchant  in 
order  to  earn  his  anxious  pittance  of  a  commis- 
sion. But  under  hard  times  the  scene  radically 
changes.  With  our  money  destroyed  and  bank 
credits  substituted,  the  mill  men  have  enormous 
burdens  to  carry,  —  accumulated  stock  of  unsold 
goods,  slow  collections,  small  or  no  profits,  and  a 
long  list  of  discounted  paper  at  banks,  some  of  it 
asking  extension.  This  the  commission  man  thor- 
oughly understands,  and  he  unloads  at  an  inside 
price  ("  confidential,  of  course  !  ")  which  it  is  hard 
for  other  dealers  to  get  above  the  next  day. 
Yes,  these  are  some  of  the  "blessings"  of  low 
prices  growing  out  of  Cleveland's  "wise"  finan- 
cial legislation  in  cutting  the  nation's  volume  of 
currency  short  by  $50,000,000  per  annum, — a 
total  difference  of  $300,000,000  in  six  years  ;  and 
this  contraction  is  still  going  on  with  its  uninter- 


REVIEW  OF  OVERPRODUCTION.  I  8/ 

rupted  "  blessing  "  of  low  prices  !  The  "  blessing  " 
of  low  prices  always  results  in  taking  the  home  and 
the  farm,  as  well  as  the  little  savings  of  years, 
from  the  toilers,  and  handing  them  over  to  the 
rich,  the  class  which  never  toils. 

In  consulting  with  members  of  the  trade,  and 
reviewing  tables,  I  find  that  cotton  has  sold  as 
high  as  $1.96  per  pound,  and  recently  as  low  as 
5  T-"^  cents  ;  and  I  was  also  informed  by  this  same 
authority  '  that  standard  i)rint-clotli  has  sold  as 
high  as  38  1-2  cents,  and  to-day  is  selling  for  2  1-8 
cents.  Just  imagine  the  profit  on  one  yard  of 
cloth  at  2  1-8  cents,  compared  with  a  profit  on 
38  1-2  cents  per  yard!  Think  of  the  wage-scale 
adjusted  to  38  1-2  cents,  compared  with  2  1-8 
cents  for  the  same  amount  of  work !  What  a 
"blessing"  the  2  1-8  cents  wage-scale  must  be  to 
the  workers  ! 

In  connection  with  the  fall  in  prices  I  will  here 
quote  a  business  letter  sent  out  by  Messrs.  Wil- 
liams, Ycrkes  &  Co.,  627  Market  Street,  Phila- 
delphia, in  October,  1885.  In  this  letter  Messrs. 
Williams,  Yerkcs  &  Co.  quote  the  prices  issued 
August  27,    1864. 

Dear  Sir :  '\'\\\\\\.w^  you  would  he  interested  in  coni- 
parin/.(  prices  of  twenty  years  ago  with  liu^se  of  the  present. 
we  .send  you  a  copy  of  a  price-list  issued  August  27,  1S64, 

'  I  am  indebted  to  Mr.  Clinton  V.  S.  KcnnnKtf)n,  ly  licdford 
Street,  Fall  River,  for  (|uotations  on  raw  cottons  and  |)iiiit 
cloths. 


1 88 


FALLING   PRICES. 


by  one  of    the  largest  dry-goods  jobbing    houses.     These 
prices,  we  believe,  were  the  highest  of  war  time;  we  think 
the  lowest  prices  Juwe  iiouq^  been  reached,  and  confidently 
look  forward  to  an  early  improvement. 
\'ery  respectfully, 

Williams,  Ykrkes  &  Co. 


PRICE   OF   ELEVEN    STAPLES. 


1885 

189S 

Prints. 

Cocheco 

.06 

.04 

Print  Cloths 

•03i 

•02tV 

GingJiams. 

Lancaster            ...... 

•07.i 

.041 

Bleached  Cottons. 

A 

New  York  Mills 

.09 

.c8 

Lonsdale    .         .         .         .         . 

.08 

•oSt5 

Hope 

.07 

•05i 

Brown  Skirtings. 

Pepperell   R  4-4         ..... 

.06 

•04.1 

Atlantic  A 

.06 

•04 1 

Brown  Sheetings. 

about 

Augusta  A 

•05. 1 

•04 1 

Lawrence  LL 

•05} 

■oz\ 

Tickings. 

Amoskeag  A.C.A.     ..... 

•iii 

.09 

What  was  the  picture  in  1864,  when  the  high 
prices  prevailed,  and  when  the  income-holding 
classes  were  so  enraged  at  the  high  cost  of  living  ^ 
To  show  what  it  was,  I  quote  the  following  table 
presenting  prices  as  they  were  in  1864,  with  a 
column  of  the  same  line  of  goods  and  prices 
prevailing  to-day,  showing  the  percentage  of 
shrinkage  : 


REVIEW  OF  OVERPRODUCTION. 


189 


Aug.  27, 

March, 

1864. 

1898. 

Prints. 

N  E  T 

Cocheco     ....... 

50 

4 

Merrimack 

50 

4i 

Sprague 

46 

Indigo  iJliie 

All 

'rurl<ey  Red 

46 

Solid  Colors 

47 

4-4  I'urple 

60 

American   . 

45 

3i 

Pacific 

46 

31 

Dunnell 

43! 

3 

Lowell  Dark 

39 

Light 

3> 

Wamsutta 

39 

Arnold 

38  i 

Amoskeag  Pink 

43 

4^ 

'*           Purple 

42 

"           Shirting 

41 

Ruby 

42 

Malory  Purple    . 

42 

Rhode  Island 

38 

Suffolk 

41 

3l 

Garner  Swiss 

42 

Eagle  &  Neptune 

y- 

-    to 

4i 

Cohoes  I'alls 

-5 

York  &  Amoskeag  Mourning    . 

40', 

London  &  Atlantic     .... 

43 

, 

Ginghams. 

Roanoke    ....... 

40 

Hampden  ....... 

40 

Lancaster  ....... 

48,1 

4| 

Everett 

47i 

4J 

Cttnton  Flannels. 

Hamilton  X  V  l5ro 

75 

•05I 

Roanoke  A  A      . 

44 

Naumkeag          ...... 

77  i 

P.lea 

80 

Portland          " 

72i 

Colored  Corse/  Jenns. 

Pepperell 

60 

^A 

Lewist<)n    . 

45 

An<iros(oggiii 

43i 

5-  A 

Indian  Orchard 

43i 
434 

Newmarket 

IQO 


FALLING    PRICES. 


Aug.  27, 

March, 

1864. 

1898. 

Brown  Shirtings. 

NET 

Boot  H  7-8 

M\ 

"     O  4-4        •         •         •         • 

54 

"     S  9-8        

60 

5A 

Nashua  D  4-4   ...... 

60 

Pacific  E  7-8 

57^ 

51  A 

"      lM-4 

62 

3:1  A 

Atlantic  E  7-8 

57 1 

5iA 

1-4-4 

62 

4A 

James  7-8 

sA 

Dwight  A  4-4    ... 

55 

Newmarket  A  4-4      ..... 

57  i 

Great  P'alls  S  7-8 

52  i- 

M  4-4 

55 

4i 

Pepperell  O  7-8 

56 

4 

"         K  4-4 

60 

4} 

Salisbury  R  4-4          ..... 

60 

4JA 

Hamilton  A  A  4-4 

47i 

Brown  S/wc tings. 

All  Standards  4-4      ..... 

72i 

4-4| 

Atlantic  R  4-4 

63 

"        D  4-4 

67  .V 

^\ 

Nashua  A           ...... 

70 

4-4  Bleached  Cottons. 

Hills's  Sem])er  Idem           .... 

65 

5' 

New  York  Mills 

11  \ 

8A 

Masonville          ...... 

70 

6 

Androscoggin 

71 

5^ 

Langdon  a  p  0 

63 

6  less  5% 

7  less  5% 

White  Rock 

74 

Black  Rock 

65 

Arkwright  Water  Twist     .... 

12\ 

Dwight  T) 

68 

13 

A  signifies  agents'  price. 

What  a  contrast  the  above  table  of  compara- 
tive prices  presents  between  the  time  when  mill 
property  was  paying  from  fifteen  to  twenty  per 
cent,  profit,  when  new  mills  were  going  up  all  over 
New  England,  when  operatives  were  building  com- 


REVIEW  OF  OVERPRODUCTIOA'.  191 

fortable  homes  for  themselves,  when  "help"  were 
coaxed  (not  driven)  to  work,  and  were  practically 
dictating  their  own  wages,  and  the  present  time, 
when  we  have  the  worst  market  ahead  which  has 
ever  been  experienced  in  the  history  of  the  trade, 
with  mill  property  an  uncertain  asset  because  earn- 
ing no  dividends  and  being  heavily  taxed,  and  with 
widespread  strikes  of  operatives  out  of  employ- 
ment and  suffering  for  the  necessities  of  life ! 
Yet  this  is  a  picture  true  to  history,  to  fact ;  not 
a  mill-owner  nor  a  manufacturer  will  dare  to  deny 
it.  Prices  are  ninety  per  cent,  lower  to-day  than 
they  were  in  1864,  and  we  now  have  ninety  per 
cent,  less  of  money  per  capita  in  circulation  than 
we  had  then.  Under  our  present  social  system, 
prices  and  volume  of  money  cannot  exist  apart 
any  more  than  could  the  Siamese  twins.  We  can- 
not dispense  with  money  as  an  instrument  of  asso- 
ciation. We  cannot  have  high  prices  with  a  small 
volume  of  currency,  nor  can  we  have  low  prices 
with  a  large  volume  of  currency.  Then  why  not 
increase  our  currency  and  raise  our  prices.'  Every 
business  man  is  desirous  of  a  rise  in  prices,  and  it 
makes  him  shudder  when  he  hears  of  another  drop 
in  them.  Yet  for  thirty  years  he  has  not  raised 
his  hand  at  the  j)olls  to  defend  his  interests, 
because  the  bank  shakes  its  finger  at  him  and 
points  to  the  need  of  discounts  during  the  coming 
month.  Is  this  liberty,  is  this  a  republic,  when 
one  class  through  govenimcnl  favoritism  can  make 


192  FALLING    PRICES. 

all  other  classes   pay  it  royalty  and  suppress  all 
criticism  ? 

Every  man  is  trying  to  dodge  the  fall  of  prices. 
You  will  often  see  men  pose  as  models  of  honor 
when  discussing  financial  policies,  especially  when 
within  hearing  of  their  bank  president.  They 
want  "honest  dollars."  They  have  "no  confi- 
dence in  men  who  are  lax  in  fulfilment  of  every 
obligation  they  assume."  But  these  same  men, 
who,  when  they  believed  the  market  was  going 
"out  of  sight,"  put  in  heavy  orders  for  goods, — • 
did  they  not  then  assume  obligations  which  they, 
while  discussing  the  dollar,  believed  in  living  up 
to  .■*  Any  error  of  judgment  in  political  opinion  is 
made  easy  to  bear  by  being  shared  by  seventy 
millions  of  people  ;  but  not  so  with  an  order  given 
to  a  mill,  in  good  faith,  for  a  million  or  two  of 
dollars,  at  a  fixed  price,  both  taking  chances  upon 
a  rise  or  fall  in  prices.  Here  is  a  chance  to  fulfil 
an  obligation  !  But  do  they  do  it .''  Some  honor- 
able men  do,  but  to  their  sorrow  and  loss.  Under 
falling  prices  the  mill  men  find  another  evil  added 
to  their  already  too  many  troubles,  —  namely,  the 
countermand  dodge,  a  thing  never  known  under 
rising  prices.  Of  course  these  orders  are  not 
countermanded  ostensibly  on  the  ground  that 
prices  have  fallen,  but  on  the  ground  that  the 
"goods  are  not  up  to  the  sample,"  or  "not  deliv- 
ered in  time."  Falling  prices  never  develop  higher 
morals  in  mercantile  transactions.     Men  versed  in 


REVIEW  OF  OVERPRODUCTION.  1 93 

finance  understand  and  can  anticipate  market 
and  prices  better  than  the  average  business  man. 
They  hold  on  to  their  cash,  and  take  advantage  of 
men  forced  to  sell ;  they  buy  only  when  sellers 
are  forced  to  sacrifice.  They  then  can  turn  goods 
quickly,  and  avoid  any  fall  of  prices  which  are  con- 
stantly taking  place. 

What  the  mill  and  factory  men  suffer  is  felt 
equally  by  the  producers  of  raw  material,  by  the 
men  who  create  wealth,  and  are  compelled  to  chase 
after  a  market  that  is  lost.  And  never,  until 
the  great  mass  of  the  people  are  enabled  to  con- 
sume up  to  the  normal  standard,  will  these  condi- 
tions improve  ;  and  this  will  never  take  place  until 
prices  adv^ance ;  and  prices  will  never  advance  until 
the  nation's  currency  is  increased  to  that  point  at 
which  such  an  advance  in  goods  can  take  place. 

The  world  of  economic  thought  justly  places 
great  weight  upon  the  opinions  of  one  of  the 
world's  greatest  statisticians,  Mr.  Augustus  Sauer- 
beck, V .  S.  S.,  of  London,  and  his  letter  following, 
being  the  last  expression  of  his  views  on  these 
world  question.s,  will  be  carefully  noted. 

This  letter  was  received  T'eb.  14,  1898,  and  reads 
as  follows  : 

London,  Fcl).  3,  iHqS. 
Lyman  F.  George,  Esq., 

Deak  Sir:  —  I  have  your  favor  of  tlic  lotli  January, 
jind  as  desired   I   send  you  the  following  :  one  copy  of  my 


194  FALLING   riUCI-.S. 

jiapcr  of  1893;  one  copy  of  my  paper  of  1S97;  two  dia- 
grams of  prices  issued  in  1895,  with  the  movements  for 
1 895-1 897  tilled  in;  one  extract  from  Statist  ^yN\\}n.  my  letter 
on  prices  in  1897.  Detailed  figures  for  1897  will  appear  in 
the  Statistical  Jimrnal,  March  number. 

...  I  hold  that  but  for  the  alteration  in  currencies  and 
the  diminished  supply  of  gold  from  1873  to  1886,  there 
would  not  have  been  any  fall  [in  prices]  up  to  1886  (as  com- 
pared with  the  average  of  1867-77  equals  100);  or,  at  all 
events,  it  would  have  been  much  smaller. 

Theoretically,  it  may  be  said  that,  if  some  articles  fall, 
others  should  rise,  keeping  the  average  of  periods  unchanged 
if  the  currency  increased  at  the  same  ratio  as  production, 
or  at  least  as  population,  and  if  the  system  of  paying,  bank- 
ing, etc.,  remains  unchanged.  But  things  generally  do  not 
remain  the  same,  and  it  is  consequendy  impossible  to  lay 
down  a  mathematical  rule.  Besides,  a  list  of  prices  must 
always  be  incomplete,  and  it  is  impossible  to  aggregate 
prices  of  everything  that  is  paid  in  money.  Wholesale 
prices  are  the  most  important,  but  they  can  only  give  a 
rough  idea  of  the  movements.  To  maintain  prices  to  a 
constant  level  is  impracticable.     I  remain, 

Yours  truly, 

A.  Sauerbeck. 

To  show  further  the  actual  condition  of  the 
New  England  manufacturing  interests  as  they 
exist  to-day,  after  over  thirty  years  of  falling 
prices,  —  a  fall  of  91  per  cent,  from  1865  to  1898, 
—  I  will  quote  from  an  editorial  from  the  Daily 
Dry  Goods  Record^  of  New  York,  of  March  29, 
1898,  which  reads  as  follows  : 

For  nearly,  if  not  quite  two  years,  the  cotton  industries 
have    struggled    against    impossibilities,   while    the    results 


REVIEW  OF   OVERPRODUCTION.  1 95 

attending  their  best  endeavors  have  gone  from  bad  to  worse. 
There  are  few,  if  any,  exceptions  to  the  rule,  wliile  the  losses 
have  reached  fabulous  figures,  —  figures  which  all  would 
have  declared  as  ruinous  and  certain  to  involve  the  industry 
in  bankruptcy,  if  two  years  ago  the  manufacturers  could 
have  seen  such  a  handwriting  on  the  wall.  The  sales  of 
manufacturing  stocks  at  Boston  every  week  tell  the  story  of 
steady  losses  and  no  dividends,  and  will  continue  to  reflect 
them  while  the  mills  continue  to  pursue  the  policy  of 
"  After  me  the  Deluge." 

As  it  is  ours,  so  it  should  be  the  sole  efforts  of  the  mills 
to  recover  the  market  for  goods  from  the  slough  of  profit- 
less prices  into  which  it  has  fioundered  so  long,  and  into 
which  it  has  sunken  deeper  with  every  endeavor  to  extricate- 
itself.  To  say  the  least,  it  is  an  unfortunate  condition  for 
many  reasons,  not  the  least  of  which  is  that  the  mills  are 
not  in  business  to  continue  losing  money  as  they  have  done 
for  two  years.  It  is  frequently  charged  that  if  the  export 
trade  was  of  usual  proportions,  the  mills'  business  would  be 
better.  In  the  matter  of  quantity  or  yards  of  goods,  llie 
export  shipments  show  a  fair  gain  over  last  year,  when 
there  was  a  sharp  increase  on  those  for  the  previous  year. 

The  root  of  the  evil  lies  deeper.  It  is  from  the  over- 
production of  last  year,  when  the  ma.sses  were  not  equipped 
to  provide  their  necessities,  because  of  an  old  indelilcdness 
having  drawn  so  heavily  upon  their  earnings. 

If  the  above  is  a  correct  statement  of  present 
conditions  in  the  trade,  and  this  after  the  coinitry 
granted  all  the  legislation  asked  for  to  help  New 
England  industries,  how  long,  I  ask,  will  it  be 
before  the  business  man  will  be  forced  to  ac- 
knowledge the  mistake  made  by  the  legislation 
of    i.SGC,  for   the  purpose  of   reducing  prices,  in 


196  FALLING   PKICES. 

order  to  produce  better  times  ?  Does  it  not  re- 
mind one  of  the  epitaph  on  a  gravestone,  which 
reads,  "  I  was  well ;  I  took  physic  to  get  better ; 
and  here  I  lie  ?  "  Though  we  have  degenerated 
so  far  from  those  times  when  mills  were  building 
everywhere,  and  paying  dividends  of  from  ten  to 
twenty  per  cent.,  and  though  we  have  been  per- 
sisting for  thirty  years  in  the  direction  of  lower 
prices,  until  conditions  described  in  the  above 
editorial  have  been  realized,  we  still  find  no  move 
made  to  reverse  the  system  which  has  resulted  so 
disastrously  to  all,  except  to  those  who  were 
instrumental  in  forcing  that  system  on  the  coun- 
try. How  long  must  these  conditions  continue, 
and  how  much  lower  must  prices  go,  before  some 
clear-headed  and  courageous  man  will  demand  a 
halt  in  our  downward  course,  and  a  vigorous  effort 
to  restore  values  to  the  property  and  products  of 
the  mills .'' 

Note.  —  The  table  on  page  188  is  my  own;  while  that  on 
pages  189  and  190  is  the  one  sent  out  by  Williams,  Yerkes 
&  Co.  The  former  shows  an  average  decline  of  twenty-seven 
per  cent,  since  Williams,  Yerkes  &  Co.  of  Philadelphia  so  con- 
fidently looked  forward  to  an  early  improvement  ;  and  the  Author 
extends  his  sympathies  to  their  successors,  Messrs.  Yerkes  Bros. 
&Co. 


CHAPTER    XV. 

REVIEW    AND    SUMMARY    CONTINUED. 

Bimetallism. 

Bimetallism  versus  Monometallism  is  likely  to 
be  a  question  over  which  the  conflicting  interests 
of  nations  will  contend  for  many  years.  It  is 
more  than  a  national  question  ;  it  is  a  world  ques- 
tion, because  the  contending  forces  that  are  trying 
to  settle  it  belong  to  no  one  nation,  but  are  found 
everywhere, — namely,  producers  and  non-produc- 
ers, the  struggling  poor  and  the  grasping  rich.  As 
the  producing  classes  feel  the  merciless  iron  hand 
of  the  money-power  griping  them  tighter  and 
tighter,  they  very  naturally  begin  to  look  into  the 
methods  of  that  power,  and  inquire  by  what  means 
it  is  increased  and  perpetuated.  Its  chief  method 
of  self-increase  and  perpetuation  is  a  shrewd  ma- 
nipulation of  the  world's  money.  In  all  civili/xd 
countries  two  metals  have  been  recognized  as 
money,  — gold  and  silver.  As  one  of  these  metals 
has  been  dropped  by  certain  monarchies  and  des- 
potisms,—  nations  in  which  the  ])roducing  classes 
have  no  voice, — and  as  in  this  republic  the  same 
thing  has  been  done  by  fraud  and  trickery,  before 
•97 


198  FALLING  rRrCES. 

the  masses  knew  anything  alioiit  it  ;  and  as  this 
disuse  of  one  metal  has  been  followed  by  results 
ruinous  to  the  value  of  all  property  in  the  hands 
of  the  producers  in  every  nation  where  silver  has 
been  demonetized,  while  the  few  nations  which  still 
retain  the  white  metal  arc  to-day  undisturbed  by 
falling  prices  or  business  distress,  —  it  is  natural, 
and  seems  reasonable,  to  conclude  that  the  demone- 
tization of  silver  has  brought  upon  the  workers  of 
the  world  the  burdens  which  are  now  pressing 
them  to  the  earth,  and  that  only  by  the  remonc- 
tization  of  silver  will  those  burdens  be  removed. 
There  is  much  to  sustain  this  conclusion,  and 
many  facts  may  be  brought  forward  to  confirm 
it. 

We  have  only  to  cite  Mexico,  which  in  1873  had 
the  same  measurements  upon  commodities  that  we 
had  in  the  United  States.  To-day  our  prices  are 
not  one-half,  and  on  many  commodities  not  one- 
third,  as  high  as  those  prevailing  in  that  country. 
In  1873  the  cotton-growers  in  the  South  received 
fifteen  cents  a  pound  for  cotton,  and  the  price  was 
the  same  in  Mexico;  but  in  1895  the  Southern 
cotton-growers  received  but  five  cents,  while  in 
Mexico  no  change  in  price  had  taken  place.  The 
same  prices  ruled  alike  in  both  countries  in  regard 
to  wheat,  which  was  about  $1.50  per  bushel  in 
I (873.  But  in  1895,  while  there  had  been  no  fall 
in  price  in  Mexico,  the  price  in  the  United  States 
had  fallen    to    forty-five    cents.     These  facts   are 


REVIEW   AND    SUMMARY    CONTINUED.     199 

startling    and    significant,    and    not    to    be    over- 
lookcil. 

It  is  the  general  opinion  of  men  of  large  finan- 
cial transactions  that  the  property  and  commodities 
of  this  nation  will  not  pay  the  obligations  against 
it.  In  1892  the  estimated  wealth  of  the  nation 
was  $70,000,000,000.  In  1894  the  different  au- 
thorities, in  estimating  the  indebtedness  of  every 
existing  form  in  the  nation,  varied  from  $28,000,- 
000,000  to  $34,000,000,000,  —  making  an  average 
of  $31,000,000,000.  In  one  year,  1893,  values 
fell  fifty  per  cent,  on  an  average  ;  some  fell  a  great 
deal  more  than  that.  Cotton  fell  from  12  cents  to 
51^  cents  a  pound.  Beeves  from  8  cents  to  3^ 
cents,  and  wheat  from  95  cents  to  35  cents.  In 
regard  to  property  in  1893  and  1894  there  was  no 
fixing  the  amount  of  fall,  as  the  encumbrances  on 
it,  no  matter  how  small,  in  nearly  every  instance 
took  the  property  ;  and  all  commodities  which 
were  not  artificially  bolstered  by  patents,  combina- 
tions, trusts,  (jr  syndicates,  tumbled  one-half.  To 
select  a  few  articles  like  oil  or  sugar,  bolstered  by 
the  trust  and  trust  legislation  ;  or  wool,  the  price 
of  which  has  since  been  lifted  higher  by  legislative 
propjiing,  —  is  not  worthy  of  argument.  Take 
away  the  extraneous  props,  anrl  let  these  articles 
come  down  with  cjther  things  until  they  rest  on 
the  single-metal  basis  of  measurenunt,  then  be 
weighed  in  the  same  scales  where  the  farmer  and 
laborer  have  been  forced  to  weigh   the  values  of 


200  FALLING  PRICES. 

their  products,  and  it  will  be  found  that  the  claim 
of  a  fifty  per  cent,  fall  is  not  an  exaggerated  state- 
ment. 

Thus  it  will  be  seen  that  if  the  debts  of  the 
nation  were  one-half  of  the  valuation  of  its  wealth 
in  1892,  and  the  jirices  of  the  material  wcaltli  have 
fallen  one-half,  the  creditor  class  now  own  the 
property  and  commodities  of  the  country.  There- 
fore it  will  be  seen  that  the  first  thing  to  be  con- 
sidered, in  changing  the  measurement  of  value 
upon  property  through  financial  legislation,  is  to 
find  out  if  there  is  any  outstanding  indebtedness 
in  a  nation. 

Perhaps  I  cannot  show  this  better  than  by 
returning  to  the  contrast  in  prices  existing  in 
Mexico  and  the  United  States  at  the  time  silver 
was  demonetized  in  1873  with  those  of  twenty 
years  later.  Let  us  take  two  ten-thousand-dollar 
neighboring  farms,  in  1873,  with  only  the  Mexican 
line  dividing  the  same,  on  which  each  owner  had 
placed  a  five-thousand-dollar  mortgage  running 
twenty  years,  with  bankers  in  their  respective 
countries,  at  six  per  cent,  interest.  It  will  be 
seen  that  it  will  take  the  value  of  two  hundred 
bushels  of  wheat  from  both  the  Mexican  and 
American  farmer,  the  first  year,  to  pay  the  inter- 
est. It  will  also  be  seen  that  while  the  Mexican 
farmer  has  continued  to  pay  and  is  still  paying  his 
interest  with  the  value  of  two  hundred  bushels,  the 
American  farmer,  under  the  change  of  our  financial 


REVIEW  AND    SUMMARY    CONTINUED.     201 

system  in  measuring  values  by  demonetizing  silver, 
is  now  and  has  for  some  time  been  forced  to  pay 
his  interest  with  the  value  of  666^  bushels, — 
thus  having  been  the  loser  of  the  difference  in 
value  of  his  crop  compared  with  that  of  his  neigh- 
bor ;  but  this  is  not  all  of  his  loss.  A  farm  is 
worth  only  that  which  it  can  pay  in  interest  upon 
investment,  and  as  a  natural  consequence  the 
value  of  a  farm  falls  in  exact  ratio  with  the  fall  in 
price  of  its  products.  Thus  while  the  Mexican 
crop-prices  have  been  sustained  for  twenty  years, 
and  the  Mexican  farm  still  remains  at  its  1873 
value  when  mortgaged,  the  v^aluc  of  the  American 
farm  and  its  crop  has  shrunken.  It  will  be  unnec- 
essary to  add  that  under  such  terrible  odds  the 
red  flag,  not  of  the  anarchist,  but  of  the  sheriff 
employed  by  the  mortgage-holder,  has  put  the 
American  farmer  and  his  family  out  in  the  road  ; 
while  all  this  time  the  Mexican  farmer  has  been 
living  in  CDmfort  and  luxury.  A\]  this  lime,  how- 
ever, the  New  Yr^rk  City  bank  papers  have  been 
telling  their  gullible  readers  how  dear  everything 
was  in  Mexico,  a  nation  of  cheap  silver  dollars  ; 
and  also  how  murh  better  off  the  people  are  in 
this  country,  where  things  arc  cheaj"),  and  money 
has  great  purchasing  power.  Yet  no  doubt  the 
American  farmer  is  still  wondiiing  how  it  was 
that  he  lost  his  farm,  when  he  grew  just  as  much 
wheat  and  lived  just  as  economically  as  did  his 
still  well-to-do  Mexican  neighbor.     To  be  sure,  he 


202  FALLING   PRICES. 

did  not  receive  as  high  a  price  for  his  wheat  ;  but 
every  banker,  broker,  and  bondholder  told  him 
that  the  money  he  received  would  buy  double  as 
much  as  the  Mexican  silver  dollar  paid  to  the 
Mexican  farmer,  and,  unless  the  farmer  has  studied 
finance  for  himself,  he  probably  is  to-day  still  try- 
ing to  solve  the  problem. 

The  manufacturers  of  the  East  have  suffered 
greatly  from  the  loss  of  the  protective  principle 
in  having  the  silver  dollar  legislated  out  of  their 
coinage  ;  for  while  it  has  caused  a  shrinkage  of 
one-half  the  value  upon  their  mills  and  machinery, 
and  kept  up  a  constant  fall  in  the  value  of  stock 
carried  in  the  mills  and  in  the  hands  of  merchants 
and  warehouses,  it  has  at  the  same  time  shut  the 
gates  of  protection.  The  manufacturer  has  got 
to  learn  that  the  better  our  money  becomes,  the 
more  really  "honest"  it  is,  the  more  inducement 
the  foreign  manufacturer  has  to  bring  his  goods 
here  to  get  it. 

Let  us  put  the  gold-standard  manufacturer  on 
the  witness-stand.  He  will  tell  us  that  our  silver 
dollar  is  worth  only  fifty  cents,  and  that  to  have  the 
free  coinage  of  such  dollars  would  require  double 
the  number  with  which  to  buy  from  Europe. 
Grant  it.  But  now  let  us  see  how,  on  this  new 
basis,  the  foreign  manufacturer  selling  in  this 
country  will  come  out.  He  ships  over  $i,000 
worth  of  goods,  and  sells  at  the  same  price  that 
the  American  manufacturer  ecets.     The  American 


REVIEW   AND    SUMMARY    CONTINUED.     203 

manufacturer  goes  home  and  pays  a  thousand 
dollars  of  debts  for  material  and  wages.  How 
about  the  foreign  manufacturer  ?  Does  he  go 
back  and  pay  a  thousand  dollars  of  debt  with  his 
$1,000?  Oh,  no!  he  goes  to  a  broker  and  buys 
exchange,  and  gets  British  gold ;  and  he  will 
receive  (taking  the  statement  of  our  gold-standard 
manufacturer)  just  $500  in  gold,  and  he  will  pay 
just  $500  in  debts  ;  and  his  experience  in  his  first 
shipment  of  goods,  after  we  have  the  free  and 
unlimited  coinage  of  silver,  will  teach  him  that  we 
have  more  than  one  way  to  add  100  per  cent,  tariff 
to  protect  our  manufacturers.  Our  manufacturers 
don't  understand  this,  but  the  free-trade  importer 
does  ;  consequently  he  is  intensely  bitter  against 
the  free  coinage  of  silver  in  this  country. 

The  New  England  people  have  had  the  idea 
whispered  into  their  ears  that  while  the  West  and 
South  would  be  injured  by  the  gold  standard,  the 
manufacturers  of  the  East  would  be  benefited. 
The  reason  laid  down  to  substantiate  the  claim  is 
that  gold  measurement  on  Western  and  Southern 
products  would  force  prices  dtnvn  from  a  silver 
standard  to  a  gold  standard,  which  means  a  drop 
of  one-half  their  value;  while  the  East,  being  a 
raw-material  using  section,  would  be  able  tf)  buy 
for  one-half  the  former  i)rices. 

Now,  this  is  the  truth;  but  wherein  has  it 
benefited  the  I^asl  t  The  East  once  paid  forty 
cents  for  cotton  before  silver  was  dropped  out  of 


204  FALLING  PRICES. 

our  coinage ;  to-day  cotton  can  be  bought  for  five 
cents.  It  has  ruined  the  South,  and  it  has  not 
benefited  the  East.  The  cotton  industries  of  New 
England  are  paralyzed,  and  the  mill  property  has 
shrunken  in  value  with  the  price  of  cotton  goods, 
which  have  touched  2^^  cents  to-day;  while  the 
operatives  have  been  brought  down  to  the  verge  of 
want.  The  Boston  papers  made  an  investigation 
into  the  conditions  of  the  New  Bedford  workers, 
and  brought  to  light  a  condition  of  things  which, 
so  far  as  want  of  food  and  fuel  is  concerned,  the 
Southern  slaves  never  knew.  As  the  Spanish 
forces  in  Cuba  conducted  their  campaign  by  the 
method  of  starving  the  inhabitants  into  a  surren- 
der, so  the  mill  operators  in  New  England  are 
determined  to  keep  their  mills  closed  until  their 
workmen  are  compelled  by  absolute  hunger  to 
return  on  reduced  wages.  This  brutality  is  the 
outgrowth  of  legislation  which  received  the  solid 
support  in  Congress  of  the  Republican  New  Eng- 
land delegation,  while  in  effect  upon  our  industries 
it  was  a  Democratic  free-trade  measure.  A  gold 
standard  means  free  trade,  and  free  trade  means  a 
gold  standard.  To  talk  of  protection  and  a  gold 
standard  is  like  talking  of  a  white  blackbird.  Yet 
New  England  is  not  alone  in  this  dense  ignorance, 
for  it  is  a  common  thing  to  hear  leading  Western 
and  Southern  men  declaring  for  free  trade  and 
free  coinage.  These  men  simultaneously  want 
free  trade  to  reduce  prices  and  free  silver  to  raise 


REVIEW    AXD    SUMMARY    CONTJXUED.     205 

them ;  which  is  like  trying  to  open  and  shut  a 
door  at  the  same  time.  One  thing  is  certain 
regarding  this  question  of  free  trade  and  a  gold 
basis,  and  that  is  that  England  is  frantic  to  get 
the  United  States  to  adopt  both.  She  wants  a 
gold  standard,  to  reduce  the  prices  on  all  our  raw 
material  and  food,  upon  which  she  depends  for  her 
mills  and  operatives ;  and  she  wants  free  trade,  to 
enable  her  to  sail  her  ships  into  our  ports  with  her 
manufactured  goods  (made  of  our  raw  material) 
without  any  customs  charge  upon  them  whatever. 
This  policy  would  result  in  reducing  our  farmers 
into  tenants  and  our  workmen  into  tramps.  The 
reverse  of  this  policy  would  be  to  reestablish  the 
free  coinage  of  silver,  thus  raising  the  price  of  all 
raw  material  and  thereby  protecting  the  farmer  and 
cotton-grower ;  to  keep  out  all  goods  which  take 
work  from  our  workmen,  thus  protecting  factory 
and  farm  alike;  and  then  to  give  all  Urilish-i^aid 
political  economists  in  this  country,  whcjse  whole 
aim  is  to  pit  the  East  against  the  West,  by  teach- 
ing the  West  free-trade  and  the  TLast  gold-standard 
doctrines,  a  free  passage  to  luiropc,  with  the  com- 
mand never  to  set  foot  on  our  soil  again.  These 
liritish  emissaries  attend  all  our  national  conven- 
tions, with  Wall  Street's  endorsement  ;  and  if  a 
Democrat  is  nominated  he  must  be  a  Free  Trader, 
or  if  a  Republican  is  nominated  he  must  be  a  gold- 
standard  man.  I'Jigland  has  kept  this  uji  for 
twelve  years,  and  in  consequence  our  country  has 


206  FALLING   PRICES. 

been  ruined  iji  both  the  farming  and  manufacturing 
sections. 

Is  it  not  time  for  Americans  to  unite  and  stand 
up  for  Americanism  ?  It  will  be  impossible  in  the 
very  near  future  to  find  men  in  power  in  this 
country,  who  favor  a  gold  standard  on  the  one 
hand,  or  free  trade  on  the  other,  whom  we  could 
trust  in  case  of  war  with  any  European  power, 
especially  with  England.  This  is  self-evident,  so 
long  as  they  continue  to  get  support  from  English 
editorials  and  English  donations  to  carry  their 
elections.  Men  so  elected  would,  of  course,  favor 
England.  To-day,  whether  a  President  is  for  free 
trade  or  for  a  British  gold  system,  he  and  his  sup- 
porters stand  together  for  the  adoption  of  British- 
American  treaties,  drawn  up  in  England,  while  all 
the  British  press  of  this  country  unite  in  extolling 
the  advantages  of  such  treaties  to  America.  What 
would  be  thought  of  a  treaty  drawn  up  out  West 
by  wheat-growers,  or  in  the  South  by  cotton- 
growers,  and  sent  to  the  House  of  Lords  for  their 
signatures  without  alteration  }  It  would  be  con- 
sidered an  insult  by  the  very  British-American 
papers  which  so  highly  commend  the  British 
treaties  sent  here.  Therefore  unless  we  assert 
ourselves  as  Americans,  ajid  establish  an  Ameri- 
can system  in  money  and  trade  which  will  give 
greater  protection  in  values  to  farmers  of  the 
West  and  to  the  workers  of  the  East,  we  may 
yet  see  British  fleets  over  here  demanding  pay- 


REVIEW    AXD    SUMMARY    CONTINUED.     20/ 

ment  of  debts  to  them  in  the  kind  of  money  dic- 
tated by  England  and  Germany ;  and  with  a 
President  in  the  White  House  controlling  our 
army  and  navy,  and  in  sympathy  with  a  British 
free-trade  system  or  a  British  gold-money  system, 
the  people  of  America  might  find  themselves  in 
an  awkward  position,  for  with  the  banks  and  met- 
ropolitan press  against  the  protesting  people,  it 
would  not  be  easy  to  get  our  government  to  de- 
fend vigorously  American  interests.  We  must 
bear  in  mind  that  our  hard  times  have  come  upon 
us  during  an  uninterrupted  period  of  thirty  years 
of  great  crops,  and  that  during  all  this  time  our 
nation  has  been  in  peace  with  all  other  nations. 
This  fact,  taken  in  connection  with  this  other  fact 
that  during  all  this  time  we  have  had  parties  in 
power  who  were  strongly  committed  to  the  sys- 
tems which  have  wrought  this  ruin  upon  us,  and 
that  we  have  had  in  our  midst  millionaire  politi- 
cians denouncing  vehemently  all  atlcmpts  on  the 
part  of  the  people  to  change  these  systems,  shows 
what  a  hold  the  money-power  has  over  us  already ; 
and  unless  this  power  is  brought  down  under  the 
control  of  the  masses,  the  time  is  not  far  distant 
when  it  will  attempt  a  move  for  an  oligarchy  sim- 
ilar to  that  undertaken  by  the  slaveholders.  Cer- 
tainly it  has  gone  far  enough  in  this  direction 
already  to  cause  widespread  alarm  among  the 
working  and  farming  classes  of  the  land.  The 
moneyed  aristocracy  of  England  care  nothing  for 


208  FALLJiV(J   PRICES. 

their  tillers  of  the  soil  or  for  the  workers  in  their 
mills ;  they  are  for  the  throne  and  the  lords  and 
gentry  every  time.  So  the  same  aristocracy  in 
this  country  are  indifferent  to  the  interests  of  the 
toiling  masses,  and  mean  to  perpetuate  their  own 
at  all  costs  to  the  people. 

To  show  that  silver  is  as  helpful  in  other  coun- 
tries in  raising  prices  as  it  is  claimed  it  would  be 
here,  I  will  quote  from  Moreton  Frewen,  of  Eng- 
land, who  said  : 

The  most  startling  economic  phenomena  in  the  history  of 
the  world's  progress  occurred  during  the  first  half  of  the  sev- 
enteenth century,  when  the  value  of  land  in  England  rose 
from  five  pounds  an  acre  to  twenty-five  pounds,  when  wages 
rose  from  two  shillings  a  week  to  twelve,  when  wheat 
rose  from  a  shilling  a  bushel  to  four  shillings,  when  all 
prices  of  whatever  commodities  rose  in  the  short  period  of 
thirty-five  years  from  three  to  six  hundred  per  cent.  Now, 
no  writer  has  ever  questioned  that  this  phenomenal  rise  of 
all  prices  was  caused  by  that  vast  mass  of  silver  from 
Potosi  which,  flowing  into  Europe  in  the  hold  of  every 
Soanish  galleon,  was  admitted  to  free  coinage  at  all  the 
leading  mints  in  Europe.  And  if,  as  Adam  Smith,  Mill, 
and  every  eminent  writer  has  expressly  admitted,  that 
great  rise  of  prices  was  caused  by  the  free  coinage  of  the 
silver  of  Potosi,  does  any  one  question  that  had  all  that 
silver  been  suddenly  demonetized  and  deprived  of  its  legal- 
tender  value,  after  prices  had  been  thus  elevated,  all  prices 
must  have  fallen  again  just  as  rapidly  as  they  rose?  and 
where  then  would  have  been  the  property  of  the  honest  in- 
vestor who  had  bouglit  his  land  for  twenty-five  pounds  per 
acre,  leaving,  say,  one-half  of  the  purchase  money  secured 
by  a  mortgage  on  that  acre,  if  the  acre  had  fallen  in  value 


REVIEW  AND    SUMMARY    CONTINUED.     209 

to  five  pounds  because  of  this  tampering  with  the  currency  ? 
And  it  is  this  confiscation  of  property,  —  of  vested  rights, — 
by  the  manipulation  and  contraction  of  the  Western  cur- 
rencies, which  forms  to-day  what  we  call  the  Silver  Ques- 
tion ;  and  seeing  that  for  all  the  world  the  silver  question 
was  cradled  in  America,  America  is  bound  to  exert  herself 
and  help  us  all  out. 

It  will  be  seen  by  the  above  quotation  that  the 
influx  of  silver  from  the  mines  of  Potosi,  and  its 
free  coinage,  gave  new  life  to  all  the  nations  of 
Europe,  and  that  prices  advanced  from  three 
hundred  to  four  hundred  per  cent. 

The  silver  men  understand  this  principle  in 
finance  to-day  thoroughly.  They  are  well-read 
upon  the  effects  it  has  upon  prices  and  business 
to  coin  silver  freely  in  any  nation,  at  any  time  and 
under  all  conditions.  They  know  it  is  beneficial 
to  the  masses ;  and  they  know  therefore  that  a 
voter  who  once  becomes  a  convert  to  free  silver 
will  remain  one,  notwithstanding  that  by  some 
powerful  political  influence  or  pecuniary  induce- 
ment he  may  change  his  vofc  to  the  gold  side. 
Hence  this  question  of  the  free  coinage  of  silver, 
as  a  party  issue,  is  sure  to  overshadow  all  others 
until  it  is  solved  in  some  manner  which  will  give 
the  people  a  living  chance  in  the  world.  Should, 
however,  prices  advance  two  hundred  i)er  cent,  on 
labor  and  commodities  as  a  result  of  the  free 
coinage  of  silver,  it  would  take  the  masses  ten 
years  to  regain  the  p(jsitions  Ihcy  held  in   relation 


2IO  FALLING   PRICES. 

to  the  investing  classes  five  or  six  years  ago,  and 
it  would  take  twenty  years  under  it  to  get  back  to 
the  relative  position  held  thirty  years  ago.  The 
silver  men  understand  the  motives  and  spirit  of 
the  rich  in  regard  to  the  reduced  conditions  forced 
upon  the  people.  The  money-powers  intend,  if 
they  can,  to  keep  the  people  just  where  they  are ; 
and,  if  they  will  submit  to  it,  to  reduce  them  to  a 
still  lower  condition.  The  silver  men  know  that 
the  only  way  the  rich  can  do  this  is  by  making  the 
gold  basis  permanent,  and  by  destroying  all  legal- 
tender  money  outside  of  gold.  But  the  silver  men 
also  know  that  the  gold  men  will  have  troubles  of 
their  own,  very  soon,  resulting  from  their  gold 
system.  It  will  not  be  long  before  it  will  become 
evident  that  only  the  richest  among  the  rich  are 
gainers  by  the  constant  fall  in  prices,  and  that  the 
state  of  things  developing  from  their  system  will 
not  only  make  values,  but  life  itself,  insecure.  It 
is  such  a  state  of  things  to  which  the  silver  men 
look  ahead  in  basing  their  calculations  for  the 
final  and  complete  success  of  their  cause. 

The  bimetallists  have  the  advantage  in  the 
coming  struggle,  from  the  fact  that  they  are  a 
unit  on  one  point ;  that  is,  that  the  withdrawal  of 
one  of  the  money  metals  has  created  a  fall  in 
prices,  and  a  general  disturbance  in  business 
throughout  the  whole  world,  and  that  business  can 
never  be  restored  until  prices  rise  to  the  normal 
level  existing  before  silver  was  conspired  against 


REVIEW   AXD    SUMMARY    COXTIXUED.     211 

by  the  legislation  of  the  world.  This  unity  of 
sentiment  in  the  silver  ranks  contrasts  strongly 
with  the  mixed  up,  conflicting,  and  multiplied 
opinions  put  forth  by  the  gold  advocates.  In  fact, 
the  gold  men  do  not  hold  out  any  plea  to  stop  or 
cure  falling  prices  and  hard  times,  but  arc  inclined 
to  think  that  it  is  none  of  their  business  and 
belongs  to  the  realm  of  an  international  bank 
oligarchy.  Many  of  them  claim  that  they  know 
nothing  about  the  question  at  all,  but  leave  it  to 
the  bankers  ;  and,  in  turn,  the  bankers  leave  it  to 
Europe  to  settle  for  us.  These  gold  men  have 
been  told  by  the  bankers  that  the  investments  of 
the  multi-millionaires  must  be  paid  in  gold  at  the 
time  of  maturity,  regardless  of  the  kind  of  money 
they  paid  when  investing,  in  order  to  maintain  the 
honor  and  credit  of  the  government  ;  and  here 
they  close  the  argument  on  finance,  and  branch 
off  on  some  one  of  the  many  superficial  notions 
growing  out  of  the  hard  times  which  are  seriously 
effecting  their  personal  calling  and  interests  in 
life.  Hence  it  is  that  we  see  fine-looking,  well- 
bred,  and  well-educated  men  in  the  gold  ranks 
contending  with  one  another,  —  some  claiming  it 
is  "overproduction,"  others  "free  trade,"  while 
many  assert  it  is  "lack  of  confidence,"  etc. 

There  is,  however,  one  very  significaiU  dilfcrence 
between  all  silver  men  and  gold  men  ;  the  lonner 
are  all  in  favor  of  good  times,  while  many  of  the 
latter  arc  satisfied  with  the  present  times,  and  can- 


212  FALLING  PRICES. 

not  see  that  anything  is  the  matter.  The  silver 
men  are  all  in  sympathy  with  the  toiling  millions  ; 
and  they  always  hope  for  the  success  of  the  cause 
of  the  laborers  when  they  engage  in  their  unequal 
conflicts  to  prevent  further  oppression  on  the  part 
of  capital.  They  sympathize  indeed  with  the 
oppressed  of  all  nations,  as  illustrated  in  their  at- 
titude in  Congress  regarding  Cuba.  They  are 
thoroughly  American  in  sentiment,  and  loyal  and 
patriotic  as  citizens ;  they  do  not  toady  to  Wall 
Street,  nor  to  foreign  nations  or  foreign  systems  ; 
they  are  opposed  to  creating  bonds  for  the  pur- 
pose of  sheltering  the  rich  from  taxation,  and  are 
against  granting  enormous  tracts  of  American  soil 
to  foreign  syndicates,  or  entering  into  entangling 
alliances  with  European  nations.  On  the  other 
hand,  we  find  the  advocates  of  the  gold  standard 
in  the  closest  touch  with  Lombard  Street  inves- 
tors ;  in  fact,  the  gold  men  have  surrendered  all 
our  financial  legislation  to  the  banks,  and  are 
wholly  guided  in  formulating  an  opinion  by  the 
press  editorials  of  Wall  Street.  You  can  scarcely 
find  a  gold  man  who  expresses  a  desire  to  see 
strikers  win  ;  they  have  little  or  no  sympathy  with 
the  producing  or  laboring  class.  There  is  no  bond 
issue,  no  contraction  scheme,  no  foreign  policy 
proposed  by  their  party  now  in  power  that  they 
do  not  approve ;  and  while  they  assert  that  the 
financial  question  is  not  a  party  question,  they  are 
always  ready  to  betray  or  desert  their  party  unless 


REVIEW   AND    SUMMARY    CONTINUED.     213 

it  inserts  their  gold  doctrines  in  its  platform.  It 
is  this  spirit  on  the  part  of  the  advocates  of  the 
gold  standard  which  drives  all  factions  of  opposi- 
tion into  one  party.  The  lines  are  already  drawn 
between  the  producing  and  non-producing  classes  ; 
and  it  has  come  to  be  a  question  between  those 
who  pay  ta.xcs  and  those  who  receive  these  taxes 
in  interest  money.  There  is  something  more  than 
the  question  of  metal  in  the, dollar  at  stake  on  the 
part  of  the  monometallists.  They  want  strong 
government  and  class  privileges  ;  they  are  in  favor 
of  long  terms  of  office,  of  biennial  sessions  of 
legislatures,  and  of  denying  all  rights  of  labor 
which  capital  is  bound  to  respect. 

While,  however,  the  silver  men  to-day  as  a  body 
are  conservative,  and  believe  that  the  restoration 
of  silver  to  its  former  position  (one  which  it  has 
held  from  the  establishment  of  our  government) 
would  satisfy  a  large  majority,  in  the  present  dis- 
tress it  is  not  safe  to  depend  upon  it  for  permanent 
relief.  Had  the  free  coinage  of  silver  been  accom- 
pli.shed  in  the  last  election,  it  would  have  closed 
for  a  long  time  all  financial  agitation  ;  but  not  so 
to-day.  Nothing  short  of  the  elimination  of  the 
redemption  j-)rinciple  in  our  money  will  satisfy  at 
least  five  millions  of  voters  in  this  country.  The 
Populists  have  cast  over  two  millions  of  votes,  and 
are  a  unit  u|)on  the  theory  of  paper  as  primary 
mf)ney ;  and  at  least  one-half  of  the  men  who 
voted    for   silver   in    i<S96    can    be  counted   ujion 


214  FALLING   PRICES. 

as  advanced  beyond  the  money  principle  of  mon- 
archists and  despots.  This  party  for  an  American 
money  will  hold  a  balance  of  power  even  after  the 
free  coinage  of  silver  has  been  gained,  and  agita- 
tion of  the  money  system  will  be  continued  until 
the  social  conditions  respond  in  full  measure  to 
the  advanced  mental  state  of  the  people.  To-day 
many  of  the  best  minds  of  the  country  believe 
that  the  rich  of  the  world  have  made  the  mistake 
of  their  lives  in  attempting  covertly  to  drop  silver 
from  the  world's  money  in  order  to  double  the 
values  of  their  holdings  ;  for  they  will  not  only 
fail  in  this  attempt,  but  they  have  started  an 
agitation  which  will  end  but  in  the  extinction 
of  both  gold  and  silver  as  money,  except  with 
a  few  small  nations  which  have  no  standing  com- 
mercially, and  are  not  much  higher  in  civilization 
than  the  pirates  of  old. 

Immigration. 
While  the  laboring  classes  are  complaining  of 
immigration  working  an  injury  to  their  interest 
(and  probably  no  one  can  be  found  who  will  deny 
it),  they  are  brought  face  to  face  with  the  fact 
that  wages  are  getting  so  low,  and  so  many  are 
out  of  employment,  that  their  argument  will  soon 
fall  to  the  ground  on  one  essential  fact, — that  is, 
that  there  will  be  no  longer  any  immigration  to 
this  country.  If  our  present  .systems  continue, 
we  shall  have  to  complain  of  emigration  instead 


REVIEW  AND   SUMMARY   CONTINUED.      21  5 

of  immigration.  With  a  monetary  system  ad- 
justed to  the  interests  of  the  many  instead  of 
the  few,  our  country  cannot  have  too  many  men 
who  are  strong,  healthy,  and  brainy,  as  every  such 
man  will  add  to  our  wealth-creating  power,  and,  at 
the  same  time,  consume  more  than  he  produces  ; 
instead  of  adding  to  our  accumulated  goods,  he 
would  help  reduce  the  supply  on  hand,  thus  mak- 
ing work  for  others  in  replenishing  the  same. 
Let  us  have  a  volume  of  money  sufficiently 
large  to  force  up  wages  until  these  men  can 
afford  to  get  married,  to  build  a  home,  and  fill 
it  with  furniture,  and  be  enabled  with  their  fam- 
ilies to  live  as  self-respecting  beings  should  live, 
and  then  we  shall  have  an  insufficiency  of  labor. 
Men  do  not  work  overtime  for  the  love  of  work. 
Give  them  pay  which  will  allow  of  their  living 
comfortably  on  eight  hours  for  a  day's  work,  and 
we  shall  soon  find  more  work  than  men  to  do  it. 
Then  prices  for  labor  will  go  up  another  notch, 
and  the  man  will  be  enabled  to  increase  his  con- 
suming power,  while  his  producing  power  will 
remain  the  .same.  We  mu.st  keep  this  fact  con- 
stantly in  mind,  that  the  way  to  reduce  accumu- 
lated stocks  is  to  give  that  remuneration  to  labor 
which  will  enable  it  to  consume  more  than  it  can 
produce.  Under  this  principle  oui-  markets  will 
always  be  short  of  goods,  and  wages  will  con- 
stantly increase.  This,  however,  it  is  impossililc 
to  do  if  our  volume  of  money  is  so  small  that  tall- 


2l6  FALLING   PRICES. 

ing  prices  force  the  emjiloyer  to  stop  work,  close 
his  mill,  and  discharge  his  help.  It  is  this  power 
which  the  volume  of  money  exerts  over  everything 
which  controls  the  destiny  of  the  world  ;  and  that 
is  the  reason  why  the  rich  keep  control  of  the 
money-issuing  power,  and  will  fight  before  they 
will  permit  the  workers  to  increase  its  volume  to 
that  extent  where  a  rise  in  the  price  of  labor  and 
commodities  will  be  the  result.  The  rich  produce 
nothing,  so  to  speak  ;  consequently  they  would  re- 
ceive no  benefit  from  a  rise  on  the  price  of  things, 
while,  on  the  other  hand,  they  would  be  compelled 
to  pay  that  risen  price. 

Trusts  and  Department  Stores. 
The  trust  is  the  modern  iconoclast  which  has 
come  to  break  in  pieces  all  established  systems  of 
trade  and  commerce.  Individualism  cannot  stand 
a  day's  conflict  against  collectivism.  The  trust 
has  every  essential  feature  of  monarchy  and  des- 
potism, in  centralized  influence  and  capital,  to 
back  its  demands  upon  government  and  markets. 
It  is,  by  its  very  nature,  the  ally  of  corporations. 
It  has  corruption  for  its  corner-stone,  and  tribute 
for  its  capstone.  It  preys  upon  all  smaller  com- 
petitors, first  assailing  and  then  destroying  them. 
It  is  the  ideal  system  of  the  investing  and  moneyed 
classes  ;  but  it  is  the  terror  of  the  helpless  masses, 
who  are  constantly  being  levied  upon  for  greater 
tribute  in  their  every  purchase.     Its  influence  at 


HE  VIEW  AND   SUMMARY  CONTINUED.      21/ 

the  bank  is  such  as  financially  to  crush  any  com- 
petitor. The  favors  granted  to  it  by  the  railroads 
in  discriminations  on  freight  will  enable  it  to  ex- 
tend its  power  and  to  control  trade  all  over  the 
land.  It  has  but  one  buyer,  and  he  becomes 
dictator.  The  banks  work  with  him,  in  squeez- 
ing the  holders  of  crops  and  merchandise  during 
the  selling  season,  thus  forcing  them  to  sell  at 
the  trust's  figure. 

Under  this  trust  system,  I  repeat,  the  people  are 
powerless,  as  the  trust  heads  them  off  through  brib- 
ery, in  every  attempt  made  to  protect  themselves  ; 
whether  in  the  courts  or  in  legislatures,  the  trust's 
attorney,  like  the  city  detective,  keeps  the  people 
under  surveillance.  If  competitors  are  obstinate 
and  troublesome,  the  trust  does  not  scruple  to 
trump  up  .some  criminal  charge  against  them,  thus 
involving  them  in  ruinous  expense  ;  and  with  the 
judge  on  the  bench,  who  is  often  a  heavy  holder  of 
trust  stocks,  any  appeal  only  carries  the  victim  to 
a  surer  fate  in  the  higher  courts,  where  appoint- 
ments are  not  seldom  made  in  recognition  of  trust 
contributions  during  election.  The  trust  is  the 
monster  which  the  rich  love  and  the  ])C()ple  hate. 
Its  power  over  local  merchant  and  producer,  and 
over  its  hirelings  in  government,  who  refer  to  it 
as  being  a  "  blessing  to  the  people,"  shows  how 
far-reaching  and  to  what  dangerous  ])roportions 
this  octopus  of  greed  has  already  attained.  'Jhc 
trust   is  the   handwriting  on   the  wall,   foretelling 


2l8  I'ALIJNC   PRICES. 

the  bankruptcy  of  the  merchants  and  jobbers  of 
our  land.  It  designs  curtaihiicnt  in  the  creation 
of  wealth  on  the  one  hand,  and  extortion  from  the 
people  on  the  other.  No  nation  can  stand  when 
its  rulers  join  hands  with  such  a  monstrosity. 
The  rulers,  allotted  a  share  in  its  profits,  allow 
the  trust  to  take  the  people  by  the  throat  while 
it  rifles  their  pockets. 

The  department-store  system  bears  the  same 
relation  to  the  cities  and  towns  as  the  trust  does 
to  the  whole  country.  While  in  some  things  the 
department  stores  and  trusts  are  rivals,  on  the  whole 
they  are  allies.  If  the  trust  completely  controls 
an  article  and  fixes  its  price  for  the  whole  nation, 
the  department  store  will  use  that  article  and  join 
with  the  trust  in  protecting  its  price  ;  and,  in  con- 
sideration of  this,  the  trust  forces  the  small  dealers 
out  of  handling  the  article  by  giving  the  depart- 
ment store  a  rebate  amounting  to  a  profit.  It 
is  no  uncommon  remark  to  hear  retailers  in 
special  lines  say  that  they  cannot  buy  at  wholesale 
as  low  as  the  department  store  retails  the  same 
goods.  Under  such  combinations  there  is  not  a 
spark  of  hope  left  for  the  future  of  small  re- 
tailers. The  only  hope  is  that  some  day  the 
American  people  will  be  so  stirred  by  the  monopo- 
lizing: greed  of  their  inhuman  and  brutal  masters 
and  tormentors,  that,  in  their  terribly  distressed 
condition,  —  a  condition  forced  upon  them  by,  and 
growing  out  of  the  combination  of  capital,  aided  by 


RE  VIE  IV  AND   SUMMARY  COXTINUED.      219 

political  parties  and  bosses,  —  they  will  rise  up  as  a 
man  and  vote  their  oppressors,  root  and  branch,  out 
power,  and  put  men  like  Andrew  Jackson  in  their 
places.  Yes,  the  American  people  must  find  a 
man  with  the  patriotism  of  a  Washington,  the 
nerve  and  courage  of  a  Jackson,  the  intelligence 
of  a  Jefferson,  and  the  honesty  of  a  Lincoln,  before 
this  terrible  power  can  be  dethroned.  Such  a 
man  will  not  be  found  in  Wall  Street,  nor  will  he 
receive  Wall  Street's  endorsement,  nor  be  elected 
by  the  aid  of  its  pooled  millions.  Once  elected, 
however,  such  a  man  will  meet  the  bank  kings,  the 
trust  promoters,  the  syndicate  barons  and  rail- 
road magnates,  as  President  Jackson  met  Nicholas 
Biddle,  the  old  government  bank  king ;  and  when 
these  Wall  Street  multi-millionaires  present  them- 
.selves  at  the  White  House  and  make  their  de- 
mands, first  using  bribes  and  afterwards  threats, 
this  man  will  answer  them  as  President  Jackson 
answered  Biddlc's  hirelings  :  "  Do  you  men  come 
here  to  threaten  me.''  If  you  dare  to  put  any  of 
your  threats  into  execution,  by  the  Great  Internal, 
I  will  hang  you  as  high  as  Ilaman  !  "  This  nation 
has  some  such  experience  as  this  to  ]iass  through 
before  the  fall  in  prices  can  be  stopped  ;  before 
we  can  have  a  peoi)lc's  money  ;  before  we  can  put 
the  people  to  work  ;  and  before  a  lasting  pros- 
perity can   be   restored   to   the  countr)'. 


2  20  FALLING  PRICES. 

Ovcrprothtction. 
When  markets  become  choked  up  with  goods, 
and  there  is  no  demand,  the  cry  goes  out  from 
the  merchants  to  mills  and  farms  to  stop  ship- 
ment, because  the  country  has  overproduced ! 
This  looks  so  self-evident  to  the  men  whose 
stores  are  piled  up  with  goods  that,  when  taken 
into  consideration  with  another  fact,  —  that  every 
country  buyer  says  that  his  store  is  filled  up  with 
goods  sufficient  to  last  him  a  year,  —  one  cannot 
wonder  how  general  and  popular  the  cry  of  "  over- 
production "  becomes.  It  is  evident,  however, 
that  these  men  do  not  look  beyond  their  nose, 
which  is  kept  right  down  to  their  sale-book  and 
stock-book.  They  find  the  pages  of  the  latter 
covered  with  invoices  of  goods  received,  while  the 
former  records  but  few  or  no  sales.  Inquiry  among 
the  dealers  reveals  the  fact  of  this  condition  of 
trade  being  general,  and  as  a  conclusion  the  so- 
called  "practical  business  man,"  in  the  most 
positive  and  dogmatic  manner,  asserts  "  overpro- 
duction "  to  be  a  glaring  fact,  and  "  has  no  time 
to  talk  with  theorists  in  discussing  the  matter." 
The  thought  does  not  glimmer  in  his  mind  that 
national  laws  are  never  suspended  ;  that  Nature 
is  always  acting,  always  creating,  and  always  util- 
izing. These  men  are  like  the  farmers  located  on 
farms  on  the  rich  river  bottom  of  the  Mississippi, 
covering  a  thousand   miles,  but   depending  upon 


REVIEW  AND  SUMMARY   CONTINUED.      221 

irrigation,  who,  when  a  landslide  takes  place,  com- 
pletely damming  up  the  waters,  and  causing  the 
crops  of  the  country  above  the  dam  to  become 
submerged,  and  those  below  to  become  dried  up, 
never  go  off  of  their  farms  to  look  for  the  cause, 
or  give  any  time  to  reasoning  about  the  matter ; 
but  all  above  the  dam  have  a  very  positive  opinion 
that  there  is  an  overproduction  of  water,  while 
those  below  the  dam  are  just  as  positive  that  there 
is  an  undersupply  of  it.  From  the  narrow  stand- 
point of  personal  experience  they  are  both  right  ; 
but  from  the  broader  standpoint  of  one  who  always 
traces  effect  back  to  cause,  they  are  both  wrong. 
By  opening  a  channel  in  the  obstruction  in  the 
river,  and  reestablishing  the  normal  flow  of  its 
circulation,  these  farmers  would  find  that  the  too 
much  water  in  the  one  case,  and  the  too  little 
water  in  the  other,  would  quickly  be  restored  to 
an  equilibrium. 

This  is  precisely  the  case  of  overproduction,  or 
the  opj)osite  cry  of  underconsumption.  From  a 
limited  view  the  fact  is  only  too  obvious;  but 
a  broader  view  i.<;  obtained  when  we  follow  effect 
back  to  cause  for  this  uimatural  condition  of  af- 
fairs. Let  the  merchants  go  to  the  mills  and 
factories,  and  see  if  they  have  been  doubling  their 
outinit  ;  that  is  to  say,  if  stocks  have  doubled  on 
the  market.  If  the  investigation  shows  no  increase 
of  output,  then  let  them  gf)  among  the  consumers, 
and  ascertain,  first,  if  they  have  all  the  supplies 


222  FALLING   PRICES. 

they  need  ;  and,  second,  iL  they  have  all  the  money 
they  need  with  which  to  purchase  them.  By  so 
doing,  one  will  soon  locate  or  fix  upon  the  cause. 
If  it  should  be  found  that  the  people  need  the 
supplies,  but  are  without  the  money  to  purchase 
them,  then  it  will  not  be  the  oversupply  of  goods, 
but  rather  the  undersupply  of  money  which  causes 
the  trouble  ;  and  by  correcting  the  money-supply, 
by  opening  the  channel  of  circulation  of  money,  the 
accumulated  goods  —  like  the  accumulated  water 
above  the  dam — will  soon  be  reduced,  and  flow  into 
the  hands  where  they  are  so  much  needed.  Be  sure 
and  watch  the  interests  of  your  workers,  see  that 
they  receive  sufficient  remuneration  to  enable 
them  to  consume  to  the  extent  of  their  real  wants, 
and  then  no  accumulation  of  goods  can  take 
place.' 

Supply  and  Demand. 

Connected  with  the  cry  of  "  overproduction " 
is  that  one  of  "  supply  and  demand."  Just  as 
a  man's  belief  in  certain  religious  systems  is  a 
barometer  of  his  spiritual  unfoldment  and  un- 
derstanding, so  his  belief  in  regard  to  certain 
social-economical  questions  shows  the  degree  of 
knowledge  to  which  he  has  attained  concerning 
the  world's  systems  of  money,  and  the  understand- 

'  See  Chapter  VI.,  for  a  monetary  system  which  will  restore 
prosperity. 


REVIEW  AND   SUMMARY   CONTINUED.      223 

ing  of  their  effect  upon  the  law  of  demand  and 
supply  of  things,  including  money  itself. 

An  overdemand  for  goods  means  an  under- 
supply,  as  much  as  an  oversupply  means  an 
underdemand ;  and  a  regulator  by  which  the 
law  of  demand  and  supply  can  establish  an  equi- 
librium is  of  all  things  the  one  most  needed. 
That  such  a  regulator  exists  in  the  volume  of  the 
medium  of  exchange,  every  financial  authority  of 
any  repute  fully  understands.  Here,  however,  the 
selfishness  of  man  interferes.  All  excesses  must 
pay  a  penalty.  If  men  with  tremendous  capital 
and  irrisistible  influence  control  the  making  and 
execution  of  the  nation's  laws  in  their  own  inter- 
est, robbing  the  many  to  enrich  the  few,  congest- 
ing instead  of  distrilniting  the  productions  of  labor, 
we  must  expect  that  the  penalty  will  come  in  the 
sha[)e  of  disturbance  of  the  equilibrium  between 
supply  and  demand.  This  penalty  will  bring  to 
the  merchant  accumulated  and  perishable  stocks, 
to  the  needy  community  a  deprivation  of  the 
same,  and  to  labor  a  great  loss.  All  this,  as  a 
result  of  the  avarice  and  cunning  of  a  few  men 
who  have  acquired  political  |)Ower,  will  continue 
until  through  suffering  the  people  arouse  them- 
selves to  action,  and  take  the  govcnunent  out  of 
the  hands  of  those  who  legislate  for  corporations, 
banks,  railroads,  and  trusts,  and  place  it  in  the 
hands  of  those  who  will  legislate  in  the  interests 
of  all.     So  long  as   this    result    is  delayed,    over- 


224  FALLING   PRICES. 

production  and  underconsumption,  and  the  dis- 
arrangement between  demand  and  supply  will  not 
only  continue  but  be  intensified. 

Machinery. 

To  ignore  the  great  first  cause  which  has'  dis- 
turbed and  thrown  our  whole  social  system  into 
disorder  keeps  us  constantly  dwelling  on  mere 
effects,  and  exalting  these  into  causes.  Thus  we 
find  men  accounting  for  overproduction  by  attrib- 
uting it  to  machinery.  In  the  factory  and  on  the 
farm,  in  the  markets  full  of  farm-produce  and  in 
the  stores  filled  with  fabrics  of  the  loom,  the  gen- 
eral complaint  is  that  with  the  aid  of  machinery 
the  workers  can  produce  double  the  amount  of 
products  needed  by  the  people. 

The  reader  will  here  notice  the  difference  be- 
tween saying  that  more  goods  can  be  produced  by 
machinery  than  the  trade  demands,  and  the  saying 
that  more  can  be  so  produced  than  \.hQpeoj)le  need. 
The  deception  lies  in  the  use  of  the  terms  "trade" 
and  "people."  The  rich  buy  always;  they  may 
vary  in  quality,  but  not  in  quantity,  as  the  times 
change.  The  poor,  however,  can  buy  only  when 
they  have  work  and  wages.  It  is  not  in  the  power 
of  the  people,  even  with  the  aid  of  the  most  im- 
proved machinery,  to  overproduce  so  far  as  the 
real  wants  of  the  entire  community  are  concerned  ; 
but  when  a  part  of  the  community  have  lost  the 
power  to  buy,  and  are  no  longer  able  to  consume 


REVIEW  AND   SUMMARY   CONTINUED.      225 

to  the  extent  of  their  needs,  then  trade  is  stag- 
nated by  overproduction,  although  the  needs  of 
the  people  are  by  no  means  supplied.  To  correct 
this  condition,  the  one  great  first  cause  of  it  must 
be  removed  ;  that  is,  money  enough  must  be  sup- 
plied the  nation  —  not  in  the  kind  of  material,  but 
in  volume  —  to  raise  prices  to  that  extent  which 
will  give  to  those  who  work  sufficient  compensa- 
tion to  enable  them,  as  well  as  the  rich,  to  be  uni- 
versally and  always  consumers.  Then,  instead  of 
condemning  machinery,  the  demands  of  trade  will 
continually  call  for  more  and  better  machinery. 


CHAPTER  XVI. 


CONCLUSION. 


In  conclusion,  I  claim  to  have  made  clear,  and 
also  to  have  substantiated,  the  following  facts  : 

First,  that  from  1865  until  1872  no  nation  had 
ever  experienced  greater  prosperity  in  every  de- 
partment of  commerce  and  trade,  in  agriculture 
and  manufactures,  than  the  United  States  during 
that  period. 

Second,  that  during  this  time  our  nation  enjoyed 
the  benefits  of  the  largest  circulating  medium  ($65 
per  capita)  of  any  period  in  its  history. 

Third,  that  in  these  years  the  producing  and 
mercantile  classes  retained  a  larger  percentage 
of  the  products  they  created  than  at  any  other 
given  period  in  their  experience. 

Fourth,  that  the  common  people  were  then  buy- 
ing homes  and  furnishing  them,  were  buying  farms 
and  paying  for  them,  with  the  ready  cash  in  hand, 
as  the  result  of  high  wages  paid  for  labor  at  that 
time. 

Fifth,  that  the  producing  classes  were  then  com- 
paratively out  of  debt,  and  had  money  enough  to 
keep  the  markets  bare  of  goods,  —  a  statement 
for  which  I  will  give  authority  a  little  farther  on. 
226 


CONCL  US  I  ON.  227 

Sixth,  that  in  exact  proportion  to  the  amount  of 
money  the  nation  at  the  close  of  that  period  called 
in  and  took  out  of  circulation  by  converting  it  into 
bonds,  prices  fell,  and  times  grew  hard,  causing 
prosperity  to  be  succeeded  by  depression. 

Seventh,  that  prices  were  the  highest  when  our 
volume  of  money  was  the  greatest.  Secretary 
McCullough,  in  his  report  for  December,  1865, 
said,  "  We  now  have  about  $2,000,000,000,  nearly 
all  in  circulation  among  the  people ;  "  while  in 
1 874,  nine  years  later,  General  Logan  said,  "  Con- 
traction has  gone  on,  until  the  whole  amount  of 
currency  of  every  kind  now  outstanding  is  only 
$742,000,000."  But  Wall  Street  financiers  were 
not  satisfied  with  contracting  our  volume  of  money 
from  $2,000,000,000  in  1865,  to  $742,000,000  in 
1874,  but  clandestinely  demonetized  silver;  and 
the  silver  dollar  was  not  a  "  fifty-cent  dollar  "  then, 
but  a  one-hundrcd-cent  dollar,  while  the  gold  dol- 
lar, which  was  unmolested,  was  in  comparison  but 
a  ninety-seven-cent  dollar.  Now,  what  effect  did 
this  contraction  have  upon  prices  and  business .'' ' 
We  will  let  Senator  Logan  tell  what  kind  of  times 
we  had  in  1865,  when  McCullough,  a  tool  of  Wall 
Street,  began  to  contract  our  volume  of  money. 
General  Logan  then  said  :  "  It  was  the  contraction 
and  increased  want  of  currency,  and  not  the  su- 
perabundance,  which   produced    lh(r  necessity  f(^r 

'See  the  fall  of  prices,  as  given  on  page  7,  from  tlic  />//»- 
uiif  Tables,  from    1865  to   1875. 


228  FALLIXG   PRICPIS. 

running  in  debt,  of  which  there  is  so  much  said  on 
this  floor.  Why,  sir,  the  people  were  never  freer 
from  debt,  in  proportion  to  the  business  done, 
than  in  1865,  at  the  close  of  the  war,  when  Mr. 
McCullough  began  his  system  of  contraction,  at 
the  very  time  eleven  millions  more  people  were 
to  be  supplied."  Such  were  the  times  in  1865, 
before  contraction,  as  described  by  Senator  Logan. 
It  would  be  useless  to  picture  the  times  in  i  873 
and  1874,  after  contraction's  work  had  been  ac- 
complished, as  every  reader  of  middle  age  can 
remember  the  wild  scenes  which  then  took  place 
from  Maine  to  California.  Nearly  every  financial 
institution  in  the  land  was  shaken  to  its  founda- 
tion. Stocks  of  goods  were  thrown  on  the  mar- 
ket to  raise  money  with  which  to  pay  notes, 
regardless  of  price,  as  a  deck-load  would  be 
dumped  overboard  to  save  a  ship  from  sinking  ; 
and  this  condition  prevailed  until  1878,  when  a 
relief  measure  was  adopted  which  restored  silver 
dollars  to  our  currency.  The  United  States  Mon- 
etary Commission  of  1876  reported  three  millions 
of  people  out  of  employment  at  that  time,  and 
partial  relief  only  was  perceptible  as  the  silver 
dollars  were  coined  and  added  to  our  volume  of 
currency.  Bread-riots  and  strikes  prevailed  all 
over  the  land,  while  in  1876  and  1877  eighty-six 
railroads,  covering  fourteen  thousand,  one  hundred 
and  seventy-nine  miles,  with  an  invested  capital  of 
^912,509,000,  went  into  the  sheriff's  hands. 


CONCL  USION.  229 

Eighth,  that  falling  prices  have  continued  until 
to-day,  and  are  still  falling  ;  that  every  effort  is 
being  made  by  the  money-power  to  stop  the  coin- 
age of  silver  dollars,  and  to  destroy  all  our  present 
outstanding  dollars  (except  the  gold  dollar),  con- 
stantly aggravating  the  cause  of  the  downward 
course  of  prices,  of  depression  in  trade,  and  in- 
tensifying the  terrible  condition  of  want  and 
suffering  in  the  ranks  of  the  working-classes. 

To  show  still  more  impressively  the  extent  of 
contraction  from  1865  to  1890,  I  will  quote  the 
statement  of  Mr.  J.  K.  Hudson,  a  leading  Repub- 
lican editor,  in  April,  1890,  who  estimated  the 
amount  of  currency  at  the  close  of  the  war  in 
1865  at  $2,242,576,028.41, — ^a  circulation  per 
capita  of  S64.  The  amount  of  circulation  in  1890, 
according  to  reliable  authority,  was  as  follows  : 
"  If  I  were  deciding  this  case  upon  what  I  con- 
sider the  best  evidence,  I  should  be  bound  to  say 
that  I  believed  the  money  in  actual  circulation  did 
not  much,  if  at  all,  exceed  $500,000,000,  —  or  a 
trifle  over  $8  per  capita."  ' 

When  we  had  about  $64  in  circulation  i)cr 
capita  in  1865,  print-cloths  sold  at  38^^  cents  ; 
while  to-day,  when  we  have  a  still  smaller  volume 
of  money  in  circulation  per  capita  than  in  1890 
(since  for  five  years  coinage  of  silver  has  been 
stopped,   while  commodities  and   po])iilatioii    have 

'.Speech  of  1'.  I;,  riiimli,  in  lh<;  I'nitid  .States  .Senate,  June, 
1890. 


230  FALLING   PRICES. 

been  constantly  increasing),  print-cloth  is  selling 
for  2)^  cents.  I  can,  moreover,  say,  without  fear 
of  contradiction,  that  not  an  article  can  be  men- 
tioned which  has  not  fallen  in  price  to  conform 
with  this  contraction  of  currency,  except  those 
protected  by  a  patent,  a  trust,  or  a  monopoly,  or 
the  price  of  which  has  been  enhanced  by  flood, 
fire,  or  drought.  Therefore  I  affirm  that  to  at- 
tribute, as  so  many  do,  the  terrible  destruction  of 
values  on  farm  and  plantation,  in  store  and  mill, 
and  the  wiping  out  of  railroad  properties,  to 
"machinery,"  or  "immigration,"  or  "loss  of  con- 
fidence," or  "overproduction,"  is  simply  to  put 
effect  in  the  place  of  cause.  The  great  prime 
cause,  as  I  have  so  repeatedly  said  and  (I  believe) 
shown,  is  that  subtle  movement  inaugurated  by 
the  money -power  to  contract  our  currency,  and 
bring  it  to  a  gold  basis. 

Thus,  after  a  careful  and  studious  investigation, 
—  prompted  thereto  both  by  self-interest  and  an 
interest  in  behalf  of  my  fellow  men,  —  I  have 
reached  the  conclusion  that  the  great  and  per- 
sistent fall  in  prices  which  has  taken  place  in  the 
last  thirty  years  is  owing  to  that  contraction  of 
our  money  volume  wliich  began  in  1865,  and 
which  has  been  steadily  progressing  ever  since. 
I  also  believe  that  we  are  destined  to  have  a  still 
greater  depression  in  business,  and  a  correspond- 
ing increase  of  hard  times  and  general  suffering, 


COXCLUSIOiV.  231 

unless  the  present  scheme  of  the  money-power  to 
destroy  all  forms  of  legal-tender  paper  currency  is 
defeated.  Firmly  believing  in  the  soundness  of  my 
diagnosis  and  in  the  remedy  herein  advocated,  I 
send  forth  my  little  book  hoping  it  will  convince 
others,  and  so  contribute  to  a  restoration  of  good 
times  for  all. 

THE    END. 


Interviews  with  Leading  Business  Men 

What  They  Think  Will  Bring  Prosperity 

By  L.  F.  GEORGE. 

This  book  is  now  in  press  and  was  written  by  the  author 
of  ''  Falling  Prices  and  the  Remedy." 

Mr.  George  gives  in  this  new  work  many  of  the  inter- 
views he  had  with  prominent  business  men  in  securing  their 
subscriptions  to  his  first  book. 

When  one  considers  the  masterly  manner  in  which  he 
has  handled  the  subject  of  "  Falling  Prices,"  and  the  clear 
and  condensed  style  in  which  he  has  treated  the  panaceas 
and  quack  cures  prescribed  by  each  man,  it  is  certain  that 
these  interviews  will  prove  most  interesting  reading.  In 
many  cases  Mr.  George  solicited  his  subscriptions  with  the 
sole  purpose  of  ascertaining  the  profundity  of  knowledge 
enjoyed  by  many  of  Boston's  leading  financiers  and  busi- 
ness men.  In  mo.st  cases  he  met  gentlemen;  but  in  other 
instances  he  found  himself  involved  in  arguments  with 
ignorant  though  wealthy  boors,  and  it  is  safe  to  say  that  Mr. 
George,  with  his  finely  organized  and  sensitive  mind  and 
highly  proud  spirit,  together  with  his  illimitable  resources 
in  powers  of  grapliic  description  of  situation,  has  been  able 
to  picture  these  discourteous  persons  in  a  true  though  ludi- 
crous and  most  unenviable  light.  Those  who  know  Mr. 
George  claim  he  will  write  the  arguments  exactly  as  they 
took  place  without  fear  or  favor. 

Mr.  (ieorge  secured  something  like  eight  hundred  ad- 
vance subscriptions  for  '•  Falling  Prices."  These  sub- 
.scribers  were  not  asked  to  endorse  the  sentiments  of  the 
book,  but  the  possession  of  bona  fuie  signatures  will  go  a 
great  way  towards  proving  the  genuineness  of  tiie  inter- 
views. If  the  author  had  called  this  latest  work  tlie 
"Mysteries  of  Finance  Unravelled  "  or  "  Fconomic  Soph- 
i.stries  K.xposed "  or  "  Pearls  of  Kconomic  Fallacy  from 
the  '  Wise  .Men  of  the  Fast,'  "  he  would  have  ke|it  well 
within  the  spirit  of  his  te.xt. 

Price,  bound  in  Cloth,  $1.00.     Postage  prepaid. 

Liberal  JlHCuuntH  tci  the  trade. 

GEORGE   BOOK    PUBLISHING    CO., 

BOSTON.   MASS. 


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